Nigeria sees oil price easing to $28 Opec basket

02 Apr, 2004

World oil prices should fall during the second quarter as seasonal crude demand eases, Nigeria's Presidential Advisor on Energy Edmund Daukoru said on Thursday.
"Prices are high now but we're looking forward to the second quarter and they will come down. We don't want that fall to be catastrophic," Daukoru told reporters.
He was speaking after Opec's Wednesday agreement to press ahead with production curbs from April 1, a decision criticised by the United States and the International Energy Agency.
Daukoru said prices could ease to the top of Opec's $22-$28 price range for a basket of its crudes, a drop of $3.70 from the latest value for the index Opec uses to value its exports.
"It should be orderly and it should reflect a gentle seasonal trend rather than a catastrophic drop," said Daukoru. "It might skim the top of $28. As long as it stays in the band it shouldn't cause any panic in Opec."
World oil inventories are expected to build during the second quarter as demand eases from its winter peak. Opec says it wants to avoid inventories rising too sharply.
Oil ministers will have noted heavy builds in US crude stocks over the past few weeks. Inventories recorded a 19-month high on Wednesday, buoyed mainly by increased imports by Opec's biggest producer Saudi Arabia.
Oil prices have been above $28 for the Opec basket, valued last at $31.70, for most of the past five months.
A $28 basket would reduce the price of US crude, trading on Thursday at $35.51 a barrel, to about $32 a barrel.
Qatari Oil Minister Abdullah al-Attiyah said Opec would continue to aim for a central price target of $25 for its reference basket.
"I believe we should work very closely to see a reasonable price that consumers and producers can live with," he told reporters. "We still believe $25 is more reasonable."
"What we're seeing in the US is not necessarily related to crude, just a tightness of gasoline supply," he said.

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