OPEC keeps output steady
Meanwhile, the price for a barrel of oil crossed the $65 threshold yesterday, the first time it has been above that level since early November.
NEW YORK - Oil prices rose above $65 a barrel yesterday for the first time since early November.
Meanwhile, OPEC ministers said they would maintain daily production at current levels. They avoided the temptation to cut crude production and trample on the seedlings of global economic recovery. Instead, they bet on prices floating higher as the recession eases and demand for oil picks up.
Benchmark crude for July delivery added $1.63 to settle at $65.08 a barrel on the New York Mercantile Exchange, a six-month high.
Retail gasoline prices have shadowed oil prices, ticking higher every day this month. Gasoline prices are going up because of the rise in the cost of crude and because refiners, stung by falling demand for gasoline, have cut back sharply on production this year.
The national average pump price for gasoline yesterday was $2.45, up 1.5 cents from Wednesday - and 40.1 cents more than a month ago.
With the world oversupplied with oil, yesterday's meeting of the 12-nation OPEC oil-producing group could have chosen to tighten the spigots - an option it has often exercised to raise prices in past times of anemic demand.
The oil ministers instead elected to sit back and wait, a decision driven by the belief that the United States - the world's largest oil consumer - is gradually emerging from a severe recession and that demand there will support oil prices.
Despite the recent uptick in petroleum prices, U.S. energy consumption still hovers at its lowest level in a decade.
The Energy Information Administration said yesterday that U.S. storage facilities added an additional 106 billion cubic feet of natural gas last week, putting the overall surplus well above the five-year average.
That is largely because manufacturers and other big industrial power customers have been using less gas after slashing production and cutting jobs.
The federal government also reported yesterday that U.S. oil supplies dropped unexpectedly 5.4 million barrels last week. Though crude inventories remain near 19-year highs, it was the third week in a row that supplies have fallen.