Oil Rebounds After 10% Drop

Oil gained, after dropping 10 percent yesterday, on speculation OPEC may take further steps to support prices at its meeting later this month.
TradingEconomics.com, Bloomberg 3/3/2009 12:27:15 PM

The Organization of Petroleum Exporting Countries, implementing its biggest-ever supply cut, will devise a solution” to boost oil prices when it meets on March 15, Iran’s oil minister said. The group supplies 41 percent of the world’s oil. Royal Dutch Shell Plc said it shut some production in Nigeria after a pipeline was attacked over the weekend.

Crude oil for April delivery rose $1.50, or 3.7 percent, to $41.65 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. The price has fallen 59 percent in the past year.

Yesterday, futures plunged $4.61, or 10 percent, to settle at $40.15 a barrel, the biggest one-day drop since Jan. 7, after global equity markets slumped on reports of manufacturing declines in China and the U.S. Prices are down 9.7 percent so far this year.

Brent crude oil for April settlement rose $1.57, or 3.7 percent, to $43.78 a barrel on London’s ICE Futures Europe exchange. It declined 8.9 percent yesterday.

U.S. oil supplies probably rose last week as imports climbed and refineries ramped up operating rates, a Bloomberg News survey showed.

Crude-oil stockpiles increased 1 million barrels in the week ended Feb. 27 from 351.3 million the week before, according to the median of 12 estimates by analysts. The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.

Refineries probably operated at 81.4 percent of capacity, little changed from the week before, the survey showed.

Gasoline stockpiles probably dropped 550,000 barrels from 215.3 million in the prior week, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 1 million barrels from 141.6 million.