- The Washington Times - Thursday, March 12, 2009

NEW YORK (AP) - Oil prices rose Thursday as investors stepped in to take advantage of a plunge in crude prices this week, just three days before OPEC meets in Europe.

Benchmark crude for April delivery rose $1.59 to $43.92 a barrel on the New York Mercantile Exchange. In London, Brent prices gained $1.35 to $42.75 on the ICE Futures exchange.

“We’re seeing some profit taking today,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “A lot of people sold earlier in the week, betting prices would go down. Now they’re buying back into the market.”

The Energy Department’s Energy Information Administration said Thursday that U.S. stores of natural gas fell more than expected last week. The government reported that seasonal demand continued to rise, though it remains far below historical norms.

Natural gas inventories held in underground storage in the lower 48 states fell by 112 billion cubic feet to about 1.68 trillion cubic feet for the week ended March 6, EIA’s weekly report said. Analysts had expected a drop of between 100 billion and 105 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

As U.S. oil inventories reach historic levels, traders also are trying to anticipate what OPEC may do at its next meeting on Sunday.

The Organization of the Petroleum Exporting Countries has hinted for weeks that it could call for more production cuts to get rid of a global surplus. But oil officials from Saudi Arabia said recently they’ll focus instead on keeping OPEC members in compliance with previous cuts of 4.2 million barrels a day.

U.S. Energy Secretary Steven Chu will try to persuade OPEC ministers to avoid squeezing oil supplies more than they already have. Tighter supplies might boost revenues for oil producers, but the higher energy prices would weigh down the global economy and make it tougher to grow out of recession.

“If they force up prices at a time when many economies are deteriorating at quite a severe rate, it will prolong the slump,” said Toby Hassall, an analyst with Commodity Warrants Australia in Sydney. “If they force up prices now, it might not be in their interests in the long term.”

After six months of cutting supplies, OPEC countries haven’t reached their targeted production levels, according to a survey by Platts. The Platts survey found that OPEC drew 28.1 billion barrels a day in February, suggesting that it’s trimmed only 80 percent of its targeted cut.

Meanwhile, the nation’s appetite for oil continues to shrink as employers cut millions of jobs, laid off workers keep their cars out of the daily commute, and manufacturers slash production.

On Thursday, the government reported that retail sales fell in February for the seventh time in the past eight months, and 5.3 million people are now receiving unemployment benefits, the most on record.

Elsewhere, Chinese oil imports have dropped 13 percent in the first two months of the year while the country’s exports plunged 25.7 percent year-on-year in February.

The lower crude oil imports are showing that China is building fewer stocks than a year ago as the capacity as been mostly filled,” said Olivier Jakob of Petromatrix in Switzerland. “But the lower crude imports should not be fully extrapolated as an indicator of the state of Chinese petroleum consumption.”

And Germany’s Institute for World Economy said it expects the global economy to shrink 0.8 percent this year, the worst rate since the Great Depression. The German economy shrink by 3.7 percent, a bigger contraction than it had forecast in December.

Gas prices dropped for the fourth straight day, sliding overnight to a national average of $1.931 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Pump prices are up 0.3 cents a gallon from a month ago, but they’re $1.315 a gallon cheaper than last year.

In other Nymex trading, gasoline for April delivery rose 1.96 cents to $1.2708 a gallon, while heating oil gained 1.5 cents to $1.1481 a gallon. Natural gas for April delivery was up 8.5 cents to $3.883 per 1,000 cubic feet.


Associated Press writers Ernest Scheyder, Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide