Saudi Arabian Oil Minister Ali al-Naimi said February output will be lower than the target” set at the group’s Dec. 17 meeting, while Venezuela expressed support for fresh reductions. The U.S. Energy Department will likely say today that crude oil stockpiles gained a third week, according a Bloomberg News survey.
Crude oil for February delivery rose as much as $1.67, or 4.4 percent, to $39.45 a barrel and was at $38.97 at 11:55 a.m. London time on the New York Mercantile Exchange. Oil has tumbled 59 percent in the past year as fuel demand falls because of a global recession.
Brent crude oil for February settlement gained as much as $1.17, or 2.6 percent, to $46 a barrel on London’s ICE Futures Europe exchange. The contract expires tomorrow. Brent was $6.85 more expensive than New York crude, the widest gap since Dec. 19.
The more active March contract was at $48.13 a barrel, up 69 cents, at 11:54 a.m. London time.
Saudi Arabia is currently producing 8 million barrels a day, about level with its 8.051 million barrel-a-day allocation, al-Naimi said at a conference in New Delhi yesterday.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah, also in New Delhi, said today that the right price for oil is $70 a barrel.
Last month the Organization of Petroleum Exporting Countries agreed in Algeria to cut supply by 9 percent to 24.845 million barrels a day starting Jan. 1.
U.S. crude-oil stockpiles probably gained 2.75 million barrels in the week ended Jan. 9, according to the median of 14 responses by analysts in a Bloomberg News survey. The department will release its weekly petroleum supply report today.
Inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, also rose, according to the Bloomberg News survey.
The Energy Department reduced its forecast for crude prices this year by 15 percent to $43.25 a barrel as the economic slump in the U.S., Europe and Japan cuts global fuel demand. Global demand will shrink by 810,000 barrels a day in 2009 from last year to 85.1 million barrels a day, it said.
The price of oil for delivery December 2009 is 55 percent more than for February, allowing traders to profit if they have the ability to store crude. This structure, in which the subsequent month’s price is higher than the one before it, is known as contango.
Oil supplies at Cushing, Oklahoma, rose to 32.2 million barrels the week ended Jan. 2, up 81 percent from a year earlier and the highest in at least four years, Energy Department data show. The city is the delivery point for oil traded on Nymex.