Oil Prices Hold Ground Above $51 a Barrel
Forbes - Associated Press - March 2, 2005
Crude oil prices remained above $51 a barrel Wednesday ahead of inventory data from the United States and after an OPEC official said the group might decide against a cut in production at its next meeting.
Light, sweet crude for April delivery fell 20 cents to $51.48 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. Heating oil prices rose slightly to $1.4660 a gallon.
Brent crude futures fell 16 cents to $49.95 on the International Petroleum Exchange.
Crude oil prices dropped in New York Tuesday after the OPEC acting secretary general, Adnan Shihab-Eldin, said the group may decide at a March 16 meeting in Isfahan, Iran to maintain production levels.
Shihab-Eldin's comments came a day after Kuwait's oil minister and current OPEC president Sheik Ahmed Fahd Al Ahmed Al Sabah said the group, which pumps more than a third of the world's oil, would maintain or increase its oil supply at the meeting. Al Sabah also said that Algeria, Nigeria and Libya favor leaving quotas unchanged.
Oil prices rose 5 percent last week as a late cold snap in the U.S. Northeast and Europe raised expectations for March heating fuel consumption.
Victor Shum, an oil analyst at Texas-based Purvin & Gertz of Singapore, said the bullish effect of the cold weather was likely to cancel out the bearish comments from OPEC in the short term.
"Prices will more or less stay at the current level," he said.
Crude futures are roughly 43 percent higher than a year ago. Prices have risen sharply in recent weeks on concerns about cold weather, the declining value of the dollar and the world's tight supply-demand balance.
Later Wednesday, the U.S. Energy Department was to release its weekly petroleum supply snapshot. Last week, the agency reported that inventories of crude oil had risen by 600,000 barrels the prior week to 297 million barrels, while gasoline inventories rose by 1.8 million barrels to 223.5 million barrels. The supply of distillates - heating oil, diesel and jet fuel - slipped by 700,000 barrels to 111.8 million barrels.
SOURCE: FORBES