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Oil prices seesaw amid signs OPEC may be honoring its output cut pledge

Oil prices seesaw amid signs OPEC may be honoring its output cut pledge

Crude futures seesawed near US$55 a barrel Thursday as the market dithered about signs that OPEC members may be acting on their pledges to cut output.
Light, sweet crude for March delivery was down 17 cents to US$55.20 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Europe. Prices ranged from US$55.80 to US$54.95 during the session.
Brent crude rose 6 cents to US$55.55 a barrel on the ICE Futures exchange in London.
Crude prices initially fell more than US$1 a barrel Wednesday after the U.S. Energy Information Administration reported a larger-than-expected build in gasoline stockpiles and a surprise increase in distillates.
But then futures rebounded as traders weighed other factors in the report and the possibility of colder weather in the U.S. The contract settled 33 cents, or 0.6 percent, higher at US$55.37 a barrel Wednesday in New York, the highest settlement since Jan. 9.
Market watchers said, however, prices were not expected to remain above the US$55 a barrel level.
"I don't think it will stay higher than US$55. OPEC will try to maintain the US$50 mark but they're fighting strong bearish sentiments in the financial market," said ANZ Global Natural Resources analyst Andrew Harrington in Sydney. "They're pedaling uphill."
Larger than expected crude stockpiles despite the cold weather in the U.S. East Coast are also likely to weigh down prices, Harrington said.
Oil prices also rose Wednesday after ConocoPhillips' Chief Executive Jim Mulva said that the company was firmly instructed to curb output in its Libya and Venezuela operations. The comments led some traders to abandon their skepticism that the Organization of Petroleum Exporting Countries would not enforce the production cuts announced late last year.
"The ConocoPhillips story is another sign that OPEC is starting to comply more with cuts that were announced last year," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Heating oil futures for February were down fractionally at US$1.5801 a gallon and natural gas fell 19.1 cents to US$7.230 per 1,000 cubic feet.


Updated : 2021-06-19 13:55 GMT+08:00