NYMEX oil seen testing above $31 as oil trio meets

Reuters, 06.06.03, 9:41 AM ET NEW YORK, June 6 (Reuters) - NYMEX crude futures were called to move higher on Friday as oil ministers from Saudi Arabia, Venezuela and Mexico unexpectedly meet in Madrid to discuss oil production policy prior to OPEC's June 11 meeting. News of the meeting on Thursday helped boost prices and offset the effect of Wednesday's bearish U.S. inventory report that showed U.S. crude and gasoline supplies rising last week. NYMEX July crude was called to open 15 cents to 25 cents higher after ending ACCESS trade up 19 cents at $30.93 a barrel, trading $30.74 to $31.00. The ACCESS high duplicated the high trade from Wednesday. "We're seeing continued strength and we should take a look above $31 and see what happens," said a New York broker. "There should be some heavy resistance at $31.30." Traders will watch any rally that challenges the double top of the $31.25 April 21 high and the $31.30/$31.32 highs reached on March 31 and April 1. Technical analysts on Friday expect nearby resistance for NYMEX July crude at $31.25, with support slated at $29.65 [nL06604353]. In London at 9:36 a.m. EDT (13:36 GMT), the International Petroleum Exchange (IPE) July crude contract traded 21 cents higher at $27.65 a barrel. The one-day talks [nL06566136] in Madrid, set for 1600 GMT, will have Saudi Arabia's Ali al-Naimi, Venezuela's Rafael Ramirez and Mexico's Ernesto Martens, representing the three countries that were architects of drastic oil curbs that helped revive depressed prices in 1998 and 1999. OPEC has been trying to encourage Mexico, and its other major producer rivals Russia and Norway, to remain aligned with OPEC on output policy to prop up prices when they fall. The return of Iraq exports will also be on OPEC's agenda. The U.S. advisor to the Iraqi oil ministry said on Friday he expected exports to reach about one million barrels per day (bpd) by the end of June [nL06557069]. However, analysts said on Thursday recent high prices could have make OPEC reluctant to cut output [nL04178763]. Iraqi oil exports were poised to return to the market as the State Oil Marketing Organization announced a tender on Thursday to sell crude from storage, lifting in the second half of June. But a return to prewar production levels must overcome the post-war looting that has damaged the infrastructure. Products futures, weakened by rising inventories earlier in the week, are still very sensitive to any refinery glitches, even with refiners inhaling crude oil at record rates, using 98 percent of capacity in the week to May 30, according to government data. NYMEX July gasoline was called to open 0.25 cent to 0.35 cent higher after ending ACCESS trade up 0.36 cent at 88.88 cents a gallon. Nearby resistance is expected by chart watchers at 89.60 cents. Support should appear at 86.74 cents, a key resistance point pierced on Thursday. NYMEX July heating oil futures were called to open 0.20 cent to 0.30 cent higher after ending ACCESS trade up 0.32 cent at 77.55 cents a gallon. Resistance is expected at 77.83 cents, with support due at 75.11 cents. Copyright 2003, Reuters News Service