The dramatic drop” in oil prices has been greater than warranted by the decline in global demand, Venezuelan Finance Minister Ali Rodriguez said yesterday. OPEC must remove 800,000 barrels a day to meet its commitment to reduce output by 4.2 million barrels since September, Secretary General Abdalla el- Badri said in Qatar today.
Crude oil for April delivery rose $1.62, or 3.6 percent, to $47.14 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $48.83 today, the highest since Jan. 7. Prices are up 5.7 percent this year and have tumbled 68 percent from a record in July.
OPEC has cut production targets three times since September to combat price declines and prevent a glut on world markets. The group in December agreed on constraints aimed at cutting supplies
Oil will rise above $50 a barrel in the third quarter if OPEC cuts production by 1 million barrels a day at its March 15 meeting, Kuwaiti state news agency KUNA reported, citing Mussa Maarafi, a member of the country’s Supreme Petroleum Council.
The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years, the World Bank said. The Washington-based bank didn’t provide a specific estimate in its report yesterday.
Brent crude oil for April settlement declined 65 cents, or 1.5 percent, to $44.20 a barrel on London’s ICE Futures Europe exchange. Oil in New York traded at a premium of $2.94 a barrel to the Brent grade today, the widest spread since Nov. 13.
A premium of Brent to West Texas Intermediate, the grade traded in New York, disappeared after a weekly Energy Department report on March 4 showed a third straight drop in stockpiles in Cushing, Oklahoma, the delivery point for New York futures. Rising inventories at Cushing had pushed WTI prices to record discounts to Brent crude.