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Oil prices shoot up over concerns OPEC cut output

Oil prices shot up on Friday, boosted by mounting concerns that OPEC will cut output and by tight stocks of US gasoline, analysts said.

New York's benchmark light sweet crude contract for delivery in April surged US$0.65 to US$36.16 a barrel. Brent North Sea crude for April delivery rose US$0.66 to US$32.23.

"There is a general worry OPEC will have to implement the cut they have been talking about," said Refco market analyst Marshall Steeves.

"The weaker dollar helped the market because it reinforces the determination of OPEC to cut because the weaker dollar reduces their purchasing power," Steeves said.

The Organization of Petroleum Exporting Countries announced this month plans to cut oil output by a total of about 10 percent by April 1.

Traders also worried about US gasoline, or petrol, stocks, which fell 1.6 million barrels to 203.4 million barrels in the week to Feb. 20, according to the US Energy Department.

"The [speculative] funds are active today, trying to push prices even higher," said Prudential Bache analyst Tony Machacek in London.

Traders were nervous over whether there would be enough gasoline for the northern hemisphere summer when US motorists embark on their so-called driving season.

"Crude oil prices continue to be strongly supported by a tight US gasoline market," said Barclays Capital analyst Kevin Norrish in London.

Inventories were unlikely to rise soon, however, as US refineries were in the peak maintenance season, according to Sucden brokerage firm.

"Several US refineries have shut units for maintenance in recent days, adding to fears over tight gasoline supply," it said.
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