Oil prices rose above US$64 a barrel in Asian trading Friday after a surge in the previous session, reacting to warnings that OPEC production was at its lowest point in two years.
Light, sweet crude for May delivery rose 19 cents to US$64.04 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore.
The contract rose almost US$2 Thursday to close at US$63.85 a barrel after the International Energy Agency warned that output by the Organization of Petroleum Exporting Countries had slid to its lowest level in more than two years on production outages and self-imposed cuts.
Still, a Platts survey of OPEC production last month said the average 26.54 million barrels pumped a day by OPEC members still represented overproduction of 740,000 barrels a day above the group's production target.
Oil prices were also supported after the U.S. government reported dwindling domestic gasoline stockpiles in the face of unflagging demand.
A further rise in gasoline demand was necessary to boost crude toward US$70 a barrel, Ken Hasegawa of Tokyo brokerage Himawari CX told Dow Jones Newswires.
Total U.S. gasoline stockpiles sank by 5.5 million barrels last week to 199.7 million barrels, the U.S. Energy Information Administration reported Wednesday. Analysts had expected a 1.3 million barrel decline, according to a survey by Dow Jones Newswires.
Oil prices have been volatile the last couple of weeks, gaining nearly US$5 a barrel after Iran detained 15 British sailors and marines, dropping on their release last Thursday, and then sliding almost US$3 Monday on expectations of oversupply at a key North American delivery point before slowly recovering somewhat.
In other Nymex trading, heating oil futures gained 0.89 cents to US$1.9150 a gallon (3.8 liters) while natural gas prices added 3.1 cents to US$7.955 per 1,000 cubic feet.
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