Oil stays above USD 46 as market ponders output freeze calls

Singapore, Aug 17 (AFP) Oil prices fell in Asia today asinvestors booked profits from recent gains, but stayed aboveUSD 46 on hopes producers would decide to freeze output at ameeting next month. Prices closed at five-week highs overnight, bolstered bya weaker dollar and after remarks by OPEC kingpin Saudi Arabiaand non-OPEC rival Russia on cooperation to stabilise prices,which could include an output freeze. US crude climbed 1.8 per cent to settle at USD 46.48 abarrel in New York and Brent also advanced 1.8 per cent toclose at 49.23 in London yesterday. Both contracts were down in Asian trade on Wednesday asinvestors booked some profits, but analysts said the declinewas tempered by buying in anticipation that prices would stillgo higher. "Yes, there is an element of profit taking initially.However it looks as though… Asian traders have used thatprofit taking move down to add to long positions," saidJeffrey Halley, senior market analyst at OANDA. At around 0400 GMT, US benchmark West Texas Intermediatefor delivery in September was down 25 cents, or 0.54 per cent,at USD 46.33 and Brent crude for October fell 35 cents, or0.75 per cent, to USD 48.88 a barrel. Prices have surged by as much as 18 per cent afterclosing below USD 40 a barrel on August 2 for the first timesince April and falling into a bear market. Analysts expect prices to fluctuate ahead of theSeptember informal meeting in Algeria involving members andnon-members of the Organization of the Petroleum ExportingCountries (OPEC). Saudi oil minister Khalid al-Falih last week suggestedthat discussions could include actions to stabilise prices –widely seen as a suggestion that OPEC could revive talks ontrimming high output levels. Russian Energy Minister Alexander Novak said his country,a non-OPEC member, was working with Saudi to achieve oilmarket stability — hinting at possible cooperation on afreeze. Yesterday, a Russian delegation visited the OPECheadquarters and in a statement put out later, Novak said hiscountry was planning a possible meeting with OPEC in October. However, some analysts have voiced doubts that a freezedeal would be reached, recalling that previous efforts havefailed. "These oil summits have usually ended without anagreement, as was the case at an OPEC meeting earlier thisyear," said OANDA market analyst Kenny Fisher. "Iran, which has returned as a major producer after yearsof sanctions, scuttled that meeting and is unlikely to beagreeable to any cuts in production," he said in a note. (AFP)KJ