Crude prices held firm above US$51 a barrel yesterday, with the market worried about continuing cold weather in the northeast of the US and the possibility that OPEC will cut production this month.
Light, sweet crude for April delivery rose US$0.31 to US$51.80 a barrel on the New York Mercantile Exchange midday in Asia. Prices for heating oil also rose by about US$0.02 to US$1.4758 a gallon (3.8 liters).
Qatari Oil Minister Abdullah bin Hamad said on Sunday that the Organization of Petroleum Exporting Countries might "cut supply to stop inventories from building" on March 16 when OPEC members gather in Iran.
Hamad's comments came after Saudi Oil Minister Ali Naimi said the kingdom would not let supply rise above current levels during the second quarter. Saudi Arabia is the world's largest exporter of crude and is an influential member of OPEC.
The president of OPEC, however, sought to quell concerns last Wednesday that the group would cut production. Sheik Ahmad Fahad al Ahmad al Sabah, Kuwait's oil minister, said OPEC won't allow prices to "surge to record levels."
In response to Tuesday's nearly US$3 price spike to a three-month high, Al Sabah said OPEC would react to help cap any prices, but gave no specific details.
Traders have also cited concerns over winter weather in the northern hemisphere and US energy stockpiles, especially heating oil.
Crude futures are roughly 49 percent higher than a year ago. Prices have risen on concerns about cold weather, the declining value of the US dollar and the world's tight supply-demand balance.
Traders believe that the crude market will remain bullish despite healthy inventories.
The US Energy Department reported on Thursday that inventories of crude oil fell by 600,000 barrels last week to 297 million barrels, or 8 percent above levels a year ago. Gasoline inventories rose by 1.8 million barrels last week to 223.5 million barrels, or 9 percent higher than last year.