LONDON, (AP) – Oil prices rose slightly Thursday as markets awaited the outcome of OPEC’s meeting to discuss a possible cut of 1 million barrels a day to prop up prices.
The potential move by the cartel follows a more than 25 percent decline in oil prices since a mid-July peak above $78 a barrel and would be the first cut since December 2004, when oil traded slightly above $40 a barrel.
An OPEC official said there was “a consensus” to cut output by 1 million barrels, but no agreement had been reached “especially on the details of such a cut.”
Light, sweet crude for November delivery rose 4 cents to $57.69 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell more than $1 Wednesday on U.S. government data that showed a large increase in domestic inventories of crude.
Brent crude for December delivery on London’s ICE Futures exchange rose 18 cents to $59.76 a barrel.
Analysts have been skeptical of comments from some members of the Organization of Petroleum Exporting Countries that the group has agreed on the 1 million barrel a day cut. Moreover, they are eager to find out whether the cartel plans to reduce its official output quota or to reduce production based on actual output levels.
“Apparently there still seems to be some resistance from a few members to make the move, and in the current demand environment, the threat of an ongoing supply surplus situation is really damaging,” Fimat USA broker Mike Fitzpatrick said in a research note.
In its latest weekly report, the U.S. Energy Information Administration, the statistical arm of the Energy Department, said crude oil supplies grew last week by 5.1 million barrels to 335.6 million barrels, or 7 percent above year ago levels.
The supply of distillate, which includes heating oil, stood at 145.4 million barrels, or 15 percent above year-ago levels even after a larger-than-expected 4.5 million barrel decline. Gasoline supplies fell by 5.2 million barrels last week to 210.2 million barrels, or 6 percent above year ago levels.
The shrinking supplies of transportation and home-heating fuels came as refinery activity declined while companies performed seasonal maintenance.
On the Nymex, heating oil was flat at $1.6958 a gallon while gasoline futures inched down to $1.4683 a gallon. Natural gas rose 3.8 cents to $6.845 per 1,000 cubic feet.