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Oil prices continue surge
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August 10, 2000: 2:57 p.m. ET
Crude futures mover higher on tight inventories, supply concerns
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NEW YORK (CNNfn) - Crude oil prices continued their climb above $30 a barrel Thursday, extending the recent rally triggered by a fall in U.S. fuel stocks to 24-year lows.
Prices were given further upward momentum by signs that OPEC kingpin Saudi Arabia was not initially offering oil majors extra supplies in September as it had done this month.
U.S. light sweet crude futures rose $1 to $31.35 a barrel on the New York Mercantile Exchange. London's benchmark Brent gained 73 cents to $30.60 per barrel.
Oil shot higher after some large oil companies said Saudi Arabia had cut initial September supplies from final August volumes, which were bolstered by extra barrels issued late in July.
Major customers said they still are confident extra Saudi supplies could be offered later. "We've still got lots of time left for September," an oil executive told Reuters. "I won't be at all surprised if the Saudis allocate us extra barrels later this month."
European lifters of Saudi crude said Thursday their volume allocations were unchanged in September from August.
The news added to already bullish sentiment sparked Wednesday by American Petroleum Institute (API) data showing U.S. crude inventories at the lowest levels since March 1976.
"The API report was a big positive for crude prices," said Tom Parker, oil and gas analyst at Chase Manhattan Bank. "That was the catalyst for us going back over $30 a barrel."
Oil markets have been surprised by the recent slump in U.S. inventories despite two production hikes by the Organization of Petroleum Exporting Countries (OPEC) this year by a total 2.4 million barrels per day (bpd) to tame runaway prices.
OPEC has an official output ceiling of 25.4 million bpd, supplying roughly a third of global demand of 76 million bpd.
Saudi Arabia, the world's largest crude exporter, pledged in early July to add a further 500,000 bpd to supplies to cool overheated prices. Riyadh failed to win backing for its proposal for a third collective OPEC output hike but was believed to be going it alone by discreetly leaking extra barrels to the market.
The kingdom, which was expected to raise production by 250,000 bpd in July and by the same amount in August, has been silent on its production level.
But while traders are convinced that the kingdom has turned up its taps, it remains unclear whether Saudi output has been boosted by the full amount it pledged. 
-- compiled from staff and wire reports
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API
OPEC
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