Oil prices rose above US$53 a barrel Monday amid reports that OPEC may hold an emergency meeting to try to reverse the 13 percent plunge in oil prices this year.
Light, sweet crude for February delivery gained 31 cents to US$53.30 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. There will be no floor trading Monday as the Nymex will be shut for Martin Luther King Jr. Day, a public holiday in the United States.
Crude oil futures plummeted as low as US$51.56 Friday, the lowest in 19 months, before closing at US$52.99 a barrel, up US$1.11 on news that the Organization of Petroleum Exporting Countries was considering an emergency meeting and new production cuts.
OPEC members have not decided on whether to hold an emergency meeting to decide on the slide in crude oil prices, an Iranian Oil Ministry official told Dow Jones Newswires Sunday. Crude oil prices closed 2006 at US$61.05 a barrel.
"There has as yet been no official decision on holding an extraordinary OPEC meeting in the coming days," said Javad Yarjani, the head of OPEC affairs at the Iranian Oil Ministry.
Analysts expected trading volume to be thin Monday, and gains to be limited by the prevailing bearish sentiment. The rise is likely capped at around US$54.00 a barrel, while the market is eyeing US$50.00 a barrel, according to Masaki Suematsu, a broker at Himawari CX in Tokyo.
The energy market has had a hard time maintaining rebounds lately, despite several factors that have given prices a boost in the past: high tensions in the Middle East, growing global energy demand, escalating violence in Nigeria and the possibility of another OPEC cut.
If OPEC announced another production cut - on top of the 1.2 million barrel-a-day reduction that began in November, and the 500,000 barrel-a-day cut set to begin Feb. 1 - analysts say oil prices would likely rise. Still, OPEC's previous cuts haven't been able to keep crude prices above US$60 a barrel for long, largely because many traders doubt that the cuts are fully enforced, the AP says.
Also weighing on prices recently were persistent mild weather in parts of the United States, Europe and Asia that consume heating oil and a number of investment funds taking short positions, or bets that prices will fall.
Heating oil futures rose 1.5 cents to US$1.5186 a gallon (3.8 liters) while natural gas fell 1.4 cents to US$6.587 per 1,000 cubic feet.
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