NEWS HIGHLIGHTS

AP - Oil prices bounced back above $71 on Tuesday as the dollar fell to its lowest level against the euro in more than a year.

-- Crude oil rose for the first time in four days as the dollar declined, bolstering the appeal of commodities as a hedge against inflation.

Oil climbed 2.6 percent as the U.S. currency slipped to $1.4821 per euro, its weakest level since Sept. 23, 2008. Net crude oil imports by China, Asia’s biggest energy-consuming country, increased 18 percent to 17.92 million metric tons in August, the second-highest level on record.

“There’s at least 4 to 5 million barrels a day of excess production capacity as we go into the winter season, which would usually mean pressure on prices,” said Caruso, now a senior energy and security adviser at the Center for Strategic and International Studies in Washington. “It appears the financial markets are prompting people to look at crude oil, and we may stay in a $60 to $80 range for the foreseeable future.”

Saudi Arabian Oil Co., the world’s biggest state oil company, sees little chance of pumping crude from idle fields next year because a recovery in world demand has yet to begin, its chief executive officer said. The kingdom has idled about 4 million barrels a day, according to the oil ministry.

Brent crude for November settlement rose $1.84, or 2.7 percent, to end the session at $70.53 a barrel on the London- based ICE Futures Europe exchange.

Oil volume in electronic trading on the Nymex was 331,246 contracts as of 2:52 p.m. in New York. Volume totaled 580,080 contracts yesterday, 7.4 percent higher than the average over the past three months. Open interest was 1.15 million contracts, the lowest since Aug. 20.

Upstream and downstream activities in Nigeria's oil and gas sectors are set to nosedive as major foreign lending institutions have suspended funding the sectors, following the alarm raised by the Central Bank of Nigeria (CBN) that some Nigerian banks are not healthy,SOURCES  has learnt.It was gathered that activities mostly affected are oil and gas projects being executed by indigenous contractors...

Oil rose above $70 a barrel on Tuesday in a technical rebound after its 3.2% decline in the previous session, as traders watch for clues to the health of the global economy from a U.S. Federal Reserve meeting and a summit of G20 nations this week. (cnbc.com)

At the same time, he asserted, this drop would also hit the oil sector. “At lower oil prices, we may find it difficult to explore new oilfields,” Al-Naimi warned.

International crude prices dropped from a peak of around $147 a barrel to $40 Tuesday.

Al-Naimi said his country would like to help to stabilize the world oil market.

“Stability means oil prices maintained at a level that encourages investment, helping create a climate conducive to the development of all viable energy sources. Stability is also defined as a level providing a reasonable return to producing nations, and one that does not harm the global economy, and particularly does not hinder the prospects of developing economies,” he said.

Later, on the sidelines of the event, Al-Naimi told reporters that the Oil Producing and Exporting Countries (OPEC) wanted to make crude prices more stable and decrease volatility in the market.

“The purpose of what we are doing (in Opec) is to lessen volatility in the market, bring back stability and make it much predictable,” he said.

The Saudi minister had earlier said his country would be cutting back on oil production much below the OPEC cut.