Oil steadies after fall, bull run seen

World oil prices steadied on Friday after a mid-week fall caused by profit-taking and dealers said it was too early to call time on oil&#146...

World oil prices steadied on Friday after a mid-week fall caused by profit-taking and dealers said it was too early to call time on oil’s recent record-breaking rally. US light crude by 1345 GMT was trading just three cents lower at $39.41 a barrel following Thursday’s dollar dive. London brent crude was up five cents to $36.30 a barrel. Oil has turned tail from a recent $41.85 peak as the Organisation of the Petroleum Exporting Countries considers a big increase in output limits at a meeting in Beirut on June 3.

‘‘Thursday’s retracement was badly needed but there were many reasons the market went up and those reasons, political and otherwise, are still there,’’ said Rob Laughlin of brokers GNI.

‘‘We have started to see a bit of reality check on prices but in the longer-term I would not say the bull run was over,’’ said Tom James of Tokyo Mitsubishi Bank in London.

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Markets shrugged off comments by an OPEC source that the cartel could consider lifting quota restrictions altogether to help put psychological pressure on prices. Most expectations are for an increase somewhere on the scale of 2.3 million barrels daily, 10 percent, matching existing leakage above official limits.

Saudi Arabia, the only OPEC member with any significant immediate spare capacity, has already made clear it will be pumping real extra volumes of some 700,000 bpd, irrespective of quotas. Suspending quota limits altogether would give Riyadh official cartel clearance to pump at will. But some in OPEC may oppose a big addition for fear of a price collapse. —(Reuters)

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