Oil prices rebounded in Asian trading Friday after tumbling a day earlier amid re-emerging doubts that OPEC members are actually making the production cuts they promised last year.
Light, sweet crude for March delivery rose 24 cents to US$54.47 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. Crude prices had risen as high as US$55.90 a barrel Thursday before settling at US$54.23 a barrel.
"The drop yesterday was primarily a result of profit-taking after a rather strong price gain," said Victor Shum, energy analyst with Purvin & Gertz in Singapore. "The up and down of the prices reflect the volatility of the market."
The Organization of Petroleum Exporting Countries said it would begin cutting production by 1.2 million barrels a day in November, but some traders speculate members are not complying. The cartel said late last year it planned to cut production another 500,000 barrels a day starting Feb. 1.
Earlier this month, crude fell to US$50 a barrel, but it rose about 10 percent over the past week as cold weather returned to the heating oil-consuming Northeastern United States.
Tanker tracker Oil Movements reported that it expects exports from the Organization of Petroleum Exporting Countries to rise in mid-February _ fanning doubts that had been allayed a day earlier, when ConocoPhillips' Chief Executive Jim Mulva said the company was firmly instructed to curb output from its Libya and Venezuela operations.
"If you look at trading this week, the market has found some support above the US$50-a-barrel price mark. It appears to have found a floor due to a number of factors," Shum said citing continued cold weather in the U.S. and the announcement Tuesday by the U.S. government to double the size of its Strategic Petroleum Reserve.
Analysts expect crude-oil futures to stay in narrow range of US$54 to US$55 a barrel as "traders are likely to adjust positions ahead of the weekend," says Ken Hasegawa, a broker at Himawari CX in Tokyo.
In other Nymex trading, February heating oil futures gained 0.49 cents to US$1.5540 a gallon (3.8 liters) while natural gas prices edged up fractionally to US$6.906 per 1,000 cubic feet.