Oil prices up; OPEC weighs special caucus
Despite the slight uptick, prices have plunged 13% this year. The cartel has not yet decided on an emergency meeting.
VIENNA, Austria - Oil prices were up yesterday as traders weighed possibilities that OPEC may hold an emergency meeting as early as this week to try to reverse the 13 percent plunge in oil prices this year.
Still, with the market drifting up and down during the course of the day, prices appeared ready to lose more ground in the absence of quick action by the Organization of Petroleum Exporting Countries.
But OPEC headquarters in Vienna said such a meeting was unlikely, at least for this week.
The rise in prices also came after a fire broke out early yesterday at a Chevron Corp. oil refinery in Richmond, Calif., although the blaze was under control by daybreak. The refinery has a capacity of 240,000 barrels of crude oil per day.
In Europe, light, sweet crude for February delivery was up 17 cents at $53.17 a barrel in electronic trading through the New York Mercantile Exchange system. No floor trading was scheduled yesterday because the Nymex was closed for Martin Luther King's Birthday.
The Brent crude contract for February delivery also was up - by 31 cents - at $53.26 a barrel on the ICE Futures exchange in London.
On the Nymex, crude-oil futures fell during the day on Friday to as low as $51.56, the lowest point in 19 months, before closing at $52.99 a barrel, up $1.11 on news that OPEC was considering an emergency meeting and new production cuts.
OPEC members have not decided whether to hold an emergency meeting to decide on the slide in crude-oil prices, an Iranian Oil Ministry official told Dow Jones Newswires on Sunday.
"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.
The next scheduled meeting of the 11 OPEC nations is March 15.
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 have not been able to keep crude prices above $60 a barrel for long, largely because many traders doubt that the cuts are fully enforced.
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.
"Prices are . . . close to a 11/2-year low, and technical analysts see further downward potential," said Vienna's PVM Oil Associates.