Oil may rise this week as OPEC cuts curb supplies, survey shows
CRUDE oil prices may rise on speculation that the Organisation of Petroleum Exporting Countries (OPEC) production reductions are beginning to curb U.S. inventories and imports.
Twenty of 40 analysts surveyed by Bloomberg News, or 50 per cent, said futures would increase through March 13. Eleven respondents, or 28 per cent, forecast oil prices will be little changed and nine said that there would be a decline. Last week, 48 per cent of analysts expected prices would rise.
OPEC cut output for a seventh consecutive month in February, according to a Bloomberg News survey of oil companies, producers and analysts. OPEC has agreed on three output reductions since September. Ministers will meet in Vienna to discuss production targets.
"It looks as though the market is finally taking the OPEC production cuts as a more substantial offset to the weakness in petroleum demand," said Tim Evans, an energy analyst with Citi Futures Perspective in New York. Prices of futures may rise before OPEC's March 15 meeting in Vienna, he said.
U.S. crude-oil supplies fell 757,000 barrels to 350.6 million barrels last week, the biggest decline this year, an Energy Department report on March 4 showed. Imports declined 24,000 barrels a day to 8.77 million in the week ended Feb. 20, the lowest since September, when ports were shut in the aftermath of hurricanes Gustav and Ike.
OPEC, the Energy Department and International Energy Agency cut their oil-demand forecasts last month because of the recession in the major consuming countries.
Crude oil for April delivery rose 76 cents or 1.7 per cent, to $44.52 a barrel this week on the New York Mercantile Exchange. Prices have dropped 70 per cent from the record $147.27 a barrel reached on July 11.
The oil survey has correctly predicted the direction of futures 48 per cent of the time since its start in April 2004.
