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Oil prices rise on evidence that OPEC cutbacks to continue Iran’s deputy oil minister says leading producers want to keep cuts going for at least a quarter beyond scheduled March 31 expiration Dave Carpenter AP Business Writer
Crude oil futures staged their first big rally of the year Jan. 11 on the New York Mercantile Exchange on the strongest sign yet that OPEC will extend production cutbacks that have tightened world supplies.
Oil prices surged after Iran’s deputy oil minister, Kazempour Ardebili, said leading producers within the Organization of the Petroleum Exporting Countries want to keep the cuts going for at least another quarter beyond their scheduled March 31 expiration.
Iran heads OPEC’s output monitoring committee, which was scheduled to meet Jan. 14 in Vienna.
His comments in London helped drive crude for February deliver $1.10 higher to $25.77 a barrel on the New York Merc, after North Sea Brent had risen 89 cents to $24.62 a barrel on the International Petroleum Exchange in London.
Cuts may extend beyond second quarter With prices going OPEC’s way — higher — analysts suspect the cuts may be extended beyond the second quarter too. Thirty-dollar-a-barrel oil, once unthinkable, is possible within months if not weeks.
“I think it’s going to be steady, and higher,” said Bill O’Grady, energy analyst for A.G. Edwards & Sons Inc. of St. Louis.
Today’s high oil prices still can’t be compared to the soaring level of the late 1970s and ‘80s, he said. A price of $30 now would be the equivalent of roughly $22 a decade ago after taking inflation into account.
Other energy commodities also jumped. February heating oil rose 2.03 cents to 66.75 cents a gallon, February gasoline rose 1.76 cents to 68.72 cents a gallon and February natural gas rose 4.4 cents to $2.26 per 1,000 cubic feet.
After the close of trading, the American Petroleum Institute released weekly supply figures that showed a rise in U.S. oil stockpiles.
API reported that U.S. crude oil stores rose by 1.711 million barrels to 294.809 million barrels in the week ended Jan. 7.
U.S. gasoline inventories rose by 4.082 million barrels to 194.595 million barrels. Refineries operated at 85.8 percent capacity, down from 89.7 a week ago.
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