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US$100 a barrel 'a fair price' for oil, Chavez says

Venezuelan President Hugo Chavez on Friday called US$100 "a fair price" for barrel of oil, and said Venezuela and other OPEC-member nations would try to prevent the price from dropping below that level.

"We will do everything that must be done within OPEC to continue strengthening the price of our oil," Chavez said in a televised address.

He said "US$100 is a fair price" for a barrel.

Venezuela is one of the leading price hawks within OPEC, consistently arguing in favor of production cuts at the group's meetings.

Venezuela's heavy, sulfur-laden crude closed at US$90.13 this week -- US$3.84 more than last week, Venezuela's Energy and Petroleum Ministry said.

Venezuelan oil sold for less than US$10 in 1999, when Chavez took office.

Crude oil futures settled higher on Friday, as tensions between Turkey and Iraq and cold weather in the US Northeast snapped the market out of its one-day slump.

Light, sweet crude for April delivery settled US$0.58, or 0.6 percent, higher at US$98.81 a barrel on the New York Mercantile Exchange on Friday.

April Brent crude on the ICE futures exchange in London closed US$0.76 higher at US$97 a barrel.

Crude was mostly higher throughout the day on news that Turkish troops had entered Iraq in their battle with Kurdish separatists. Turkey serves as an oil and gas transportation hub, and Iraq is a major crude supplier to Europe.

Traders looking to push oil higher were struggling against strong headwinds, however.

Oil rose in five straight sessions between Feb. 13 and Feb. 20 before settling US$1.47 lower on Thursday. US government data released that day showed a larger-than-expected increase in crude inventories, which had many predicting that the market would head significantly lower over the next few sessions.

But Friday's gains showed that the rally had some life in it yet, and that the April contract could mount another challenge of US$100.

"I'm not a believer in US$100 oil ... but seeing is believing," said Stephen Schork, editor of the energy markets newsletter the Schork Report in Villanova, Pennsylvania.

Components of the inventory data release ignored on Thursday may have played a larger role on Friday, said Peter Beutel, president of Cameron Hanover, an energy risk management firm in New Canaan, Connecticut.

Distillates, which include heating oil and diesel, saw a 4.5-million-barrel draw last week, three times the average analyst forecast.

Cold weather across much of the US, including a winter storm that hit the Northeast Friday, has caused a late-season surge in heating oil demand.
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