Market watch: Oil prices climb on speculation of OPEC cut
By the OGJ Online Staff
HOUSTON, Mar. 2�Oil prices rose on international markets Thursday with a sudden reverse in speculation favoring a possible production cut of 1 million b/d this month by the Organization of Petroleum Exporting Countries.
Oil prices have trended down in recent weeks amid a general consensus that OPEC members would not agree to a reduction at their Mar. 16 meeting. But now traders apparently believe cartel members must take some firm action to halt the recent slide in oil prices.
Although there was no news from OPEC to support that speculation, analysis said, bottom-fishers entered the market to bid up oil futures prices on the New York Mercantile Exchange. Some technical buying also was triggered by signals that the market may have oversold during its last few sessions.
The April contract for benchmark US light, sweet crude gained 23� to $27.62/bbl on the NYMEX, and the May contract was up 18� to $27.68/bbl. Both continued to climb in after-hours electronic trading to $27.86/bbl and $27.88/bbl, respectively.
Home heating oil for April delivery advanced 0.7� to 71.61�/gal. But the April contract for unleaded gasoline dipped 0.14� to 86.7�/gal, while natural gas for the same month declined 5� to $5.19/Mcf.
In London, North Sea Brent oil futures scarcely had changed from the previous day�s close on the International Petroleum Exchange until midday, when trading was stimulated by activity on the NYMEX. The April contract for Brent closed at $25.85/bbl Thursday, up 28� for the day, after trading in the range of $25.40-$25.95/bbl. The April natural gas contract was unchanged at the equivalent of $3.39/Mcf on the IPE.
Most IPE participants apparently are still convinced there�s little need for OPEC members to increase production as long as current oil prices remain within their target range, analysts said.
On the Singapore exchange, the April contract for Brent crude rose 28� to $25.85/bbl. The May contract rose 26� to $25.97/bbl.
The average price for OPEC�s basket of seven crudes lost 17� to $23.64/bbl Thursday, still sliding toward the bottom of its target price range.
