Oil prices hit a 1994 high in mid-April, allaying fears that a price collapse might follow OPEC’s decision to maintain its quota until the end of 1994. The benchmark Brent crude, which reached a five-year low of $12.90 on 16 February, rose to $15.15 in the London futures market on 14 April.

Analysts say the firmer prices indicate that the market is paying more attention to fundamentals than the speculative gains to be made from oil trading. The monthly oil report from the London-based Centre for Global Energy Studies (CGES) says that crude markets are stronger because refinery turnarounds are ending and North Sea maintenance work is starting. Other factors encouraging firmer prices are the low level of product stocks and prolonged demand for winter fuels, CGES says.

OPEC agreed to maintain its quota at 24.52 million barrels a day until the end of 1994 at its ministerial meeting in March. Traders say that prices may weaken again as the mid-April rally was fuelled by transient factors.

GCC producers are also battling against other challenges. On 19 April, Oman’s Petroleum & Minerals Minister, Said Bin Ahmad al-Shanfari, launched a new attack on the proposed EU energy/carbon tax at a meeting of GCC and EU experts in Muscat. GCC and EU ministers are to meet in Muscat on 7 May to discuss energy and tariff issues.