Oil Prices Push Upward
NEW YORK (AP) _ Oil prices pushed higher Thursday amid renewed expectations that supplies could be sharply curtailed if OPEC acts on its agreement to hold down production.
On the New York Mercantile Exchange, the January contract for West Texas Intermediate, the benchmark grade of U.S. crude, jumped 29 cents to settle at $15.61 a barrel. The contract rose at one point to $15.76 a barrel, near the week’s high.
Other contract months also rose.
Among refined petroleum products traded on the exchange, the January contract for unleaded gasoline rose 0.70 cent to settle at 45.98 cents a gallon, while other contract months ended the day mixed. Heating oil closed up 0.94 cent at 49.18 cents a gallon, and other contracts also rose.
Analysts said trading volume was heavy with commercial activity particulary strong. They said prices seesawed throughout the day as investors bought and sold futures trying to push prices back to the $15.80-a-barrel weekly high reached Monday after the Organization of Petroleum Exporting Countries signed a new accord to reduce output by some 4 million barrels a day.
In the last hour of the session, the market staged a brief sell-off as anxiety set in over price levels, said Madison Galbraith, senior energy analyst with Merrill Lynch Energy Futures.
″Part of the fear factor involves buying now because prices are going to go higher,″ Galbraith said. ″Yet, there’s a lot of crude out there.″
Economists estimate the current glut of world oil could take months for the markets to absorb. If so, prices would remain weak for the near future despite OPEC’s new accord, which is scheduled to take effect on Jan. 1.
Nevertheless, traders noted that the January contract far outsold others amid expectations that oil supplies could be sharply curtailed if OPEC members live up to the agreement.
Helping to boost prices on Thursday was speculation that several non-OPEC oil producing nations would take an active role in helping OPEC dry up the oil glut.
″There was talk that eight producers from non-OPEC countries would meet to discuss this,″ said Linda Simard, oil broker with Drexel Burnham Lambert Inc.
Mexico, Oman, Malaysia and Norway are among the nations that agreed to discuss the possibility of reducing their own output, analysts said.