Oil has lost 9 percent this year amid concerns that the deepening global recession will further erode fuel consumption. U.S. crude supplies rose 7.2 million barrels to 346.1 million barrels last week, the highest since July 2007, the Energy Department said yesterday. OPEC is in the process of implementing a record supply cut announced in December to reverse the slump in prices.
Crude oil for March delivery was at $40.53 a barrel, up 21 cents, in electronic trading on the New York Mercantile Exchange at 12:08 p.m. London time. Prices are down 9.3 percent this year and 54 percent from a year earlier.
Brent crude in London traded at a $4.44 premium over West Texas Intermediate futures on the Nymex. Brent oil for March settlement rose as much as 95 cents, or 2.2 percent, to $45.10 a barrel on London’s ICE Futures Europe exchange. It traded for $44.86 at 11:40 a.m. local time.
U.S. fuel demand during the past four weeks averaged 19.5 million barrels a day, down 2.8 percent from a year earlier, the report showed.
The Organization of Petroleum Exporting Countries decided on Dec. 17 to trim production by 9 percent beginning on Jan. 1. The 12-member group pumped an average 28.565 million barrels a day last month, down 1.05 million from December, according to a Bloomberg News survey of oil companies, producers and analysts.
Crude oil has been trading at about $40 a barrel in the past three days. The 30-day historical price volatility for crude oil has fallen to 97 these two days, the first time the reading has dropped below 100 in about six weeks, according to data compiled by Bloomberg.