Crude oil futures showed more volatility in European trade Monday, with the wide trading range early in the session making for a choppy market.
While unrest in North Africa and in the Middle East kept the Brent contract trading above $110/barrel, news that OPEC is ready to raise crude production in the event of a supply shortage pushed the front-month contract down from the highs seen last week.
OPEC President Iran said Monday that the producers' club was ready to increase oil output if the crisis in Libya led to a shortage of supply on global markets but warned individual members, specifically OPEC kingpin Saudi Arabia, not to act hastily by raising output unilaterally.
However, at 1226 GMT, the front-month April ICE Brent crude futures contract was at $112.61/b, up $0.47/b from Friday's settle. The April NYMEX WTI contract was at $98.24/b, up $0.36/b.
"All eyes are on what's going on in the Middle East...it really does depend on what happens," a futures trader said, referring to lower Libyan output and potential increases in production from other producers.
OPEC kingpin Saudi Arabia has said that it will make up for any shortfall on world oil markets and has already offered refiners in Europe additional supply, drawing a warning Sunday from Iranian Oil Minister Masoud Mirkazemi against moving too hastily to put more oil on markets.
The CEO of Italy's Eni said last week that up to 1.2 million b/d of Libyan production out of a total 1.6million b/d had been lost since the troubles began nearly two weeks ago.
At 1230 GMT the front-month ICE gasoil contract was at $929.25/mt, up $8/mt, while NYMEX heating oil was at $2.9425/gallon, up 116. NYMEX front-month RBOB was at $2.7270/gal, down 125 points
