By Gavin Evans
Feb. 2 (Bloomberg) -- Crude oil rose a second day in New York on speculation output cuts and government stimulus plans will slow rising oil and fuel stockpiles.
Venezuela, the sixth-largest producer in OPEC, would support further output cuts by the group to prevent a glut in an already over-supplied market, Energy Minister Rafael Ramirez said yesterday. The U.S. economy, the world’s largest oil user, is “in for a tough several months” before a recovery takes hold, President Barack Obama told NBC yesterday.
“It’s all about expectations,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “There is some expectation that the Obama stimulus package will kick-start things in the U.S., and that will help the global economy.”
Crude oil for March delivery rose as much as 63 cents, or 1.5 percent, to $42.31 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $41.94 at 8:52 a.m. in Singapore.
The contract gained 0.6 percent to $41.68 on Jan. 30 as the threat of refinery strikes in the U.S. helped push gasoline futures to an 11-week high and the Commerce Department reported a smaller-than-expected contraction in the U.S. economy in the fourth quarter.
Brent crude oil for March settlement rose 32 cents, or 0.7 percent, to $46.20 a barrel on London’s ICE Futures Europe exchange. It gained 1.1 percent to $45.88 a barrel on Jan. 30.
New York futures fell 10 percent last week and are down 72 percent from the record $147.27 a barrel reached July 11. Prices reached $32.40 on Dec. 19, a four-year low for the front-month contract.
OPEC Cuts
The Organization of Petroleum Exporting Countries accounts for about 40 percent of global oil supplies and last month agreed to reduce output by 2.46 million barrels a day, or 9 percent, starting Jan. 1 to stem the slide in prices.
Members are complying “100 percent” with the new quota which is starting to bring stability to the market, Ramirez told reporters in Caracas. Still, demand has continued to contract since the new ceiling was set and Venezuela would support any additional output cuts sought, he said.
Gasoline for March delivery was barely changed at $1.2690 a gallon on Nymex after earlier falling as much as 0.12 cent. It gained 2 percent to $1.2687 on Jan. 30.
Talks to prevent a strike at 86 U.S. refineries were extended by 24 hours yesterday after unions reported “sufficient progress” to continue negotiations.
Heating oil for March delivery fell 1 percent to $1.44 a gallon. The contract rose 1.8 percent on Jan. 30.
Cold temperatures mid-week will push New York heating demand 8 percent above average this week, Meteorlogix LLC said in a forecast yesterday.
The global slump has overshadowed the usual seasonal demand influence of the northern hemisphere winter, Commodity Warrants’ Hassall said.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
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