Crude oil may rise as the Organization of Petroleum Exporting Countries reduces production to counter the recession in major consuming countries.
Crude oil may rise as the Organization of Petroleum Exporting Countries reduces production to counter the recession in major consuming countries. Twelve of 32 analysts surveyed by Bloomberg News, or 38 percent, said futures will increase through Feb. 6. Ten respondents, or 31 percent, forecast oil will fall and 10 said there will be little change. Last week, 43 percent of analysts expected prices to increase.
OPEC announced a record 9 percent cut in supply targets at a Dec. 17 meeting to bolster prices. The reduction took effect on Jan. 1. U.S. crude oil inventories rose 6.22 million barrels last week to 338.9 million barrels, the highest level since August 2007, the Energy Department reported on Jan. 28.
?Although U.S. crude oil inventories are still climbing, it"s about time for the OPEC production cuts to have an impact,? said Tim Evans, an energy analyst with Citi Futures Perspective in New York.
Crude oil for March delivery fell $4.79, or 10 percent, to $41.68 a barrel this week on the New York Mercantile Exchange. Prices have dropped 72 percent from the record $147.27 a barrel reached on July 11. Prices fell 6.5 percent in January for the seventh month in a row, the longest string of declines since Nymex trading began in 1983.
The oil survey has correctly predicted the direction of futures 48 percent of the time since its start in April 2004.