NEW YORK - Oil futures ended an erratic session higher Tuesday as investors focused on expectations that the Federal Reserve will cut interest rates and OPEC will hold production steady, and shrugged off estimates that domestic crude inventories rose last week.
Energy investors hope that stimulus efforts by the Fed and Congress will limit the damage from a slowing economy. The Fed cut interest rates sharply last week, and is expected to cut rates again on Wednesday.
"Traders are trying to gauge the success of interest rate cuts and fiscal stimuli whose effects cannot really be known for weeks or months," said Peter Beutel, president of the energy risk management firm Cameron Hanover, in a research note.
Traders were also mulling OPEC production levels. Organization of Petroleum Exporting Countries output rose by 100,000 barrels a day in January to 32.9 million barrels a day, Dow Jones Newswires reported. But OPEC ministers are expected to hold future production steady at a meeting on Friday.
"It looks as if there's not going to be any action out of OPEC," said Andrew Lebow, senior vice president of MF Global Inc. in New York.
Light, sweet crude for March delivery rose 65 cents to settle at $91.64 a barrel on the New York Mercantile Exchange after falling as low as $90.33 earlier. It was oil's first close above $91 in two weeks, but prices alternated frequently between gains and losses Tuesday.
Uncertainty about the economy remains the dominant driver of the energy market, analysts said.
"There's underlying anxiety about our economy," Lebow said.
Crude prices will be tested Wednesday when the Energy Department's Energy Information Administration issues its weekly inventory report. Oil inventories likely rose last week for the third straight time, according to analysts surveyed by Dow Jones Newswires.
At the pump, meanwhile, gas prices fell 0.3 cent Tuesday to a national average of $2.978, according to AAA and the Oil Price Information Service. Gas prices have mostly fallen lately as oil has retreated from record prices and consumer demand has been tepid.
Other energy futures were mixed Tuesday. February heating oil futures rose 1.53 cents to settle at $2.5418 a gallon on the Nymex while February gasoline futures rose 0.42 cent to settle at $2.3295 a gallon. Petroleum product prices were pushed higher by word Valero Energy Corp. will cut production at a Texas refinery by 100,000 barrels a day during maintenance that will begin next month and last 75 days, Dow Jones reported.
February natural gas futures fell 9.9 cents to settle at $7.996 per 1,000 cubic feet.
In London, March Brent crude rose 62 cents to settle at $92 a barrel on the ICE Futures exchange.
No comments:
Post a Comment