Crude-oil futures rose Tuesday, trading around $40 a barrel after having slumped nearly 6% in the previous session on demand concerns.
Crude for February delivery added 53 cents, or 1.3%, to stand at $40.44 a barrel in early electronic trading. It fell to an intraday low of $39.05 a barrel overnight.
"Given thin conditions and continuing concerns about the global economy, markets may drift lower until the end of this year but stay broadly within a range centered near $40 a barrel," wrote Nimit Khamar, energy analyst at Sucden Financial Research.
U.S. gross domestic product contracted at a rate line with economists' expectations. Inflation-adjusted GDP for the third quarter fell at a 0.5% annualized rate, unrevised from the previous estimate, the Commerce Department said.
It's the weakest quarterly performance for GDP since the first quarter of 2001. For the current quarter, economists are predicting a sharp decline -- in the neighborhood of 6% -- that would be the biggest drop since the early 1980s. See Economic Report.
Oil ended down 5.8% on Monday, as demand concerns outweighed news that the Organization of Petroleum Exporting Countries could further cut production.
Crude imports to China, the world's second-largest consumer of oil, fell to their lowest level this year, the General Administration of Customs said Monday.
"The Chinese economy is rapidly losing steam, and is not proving immune, or 'decoupling' for that matter, from the weakness that is originating from the U.S.," said Edward Meir, an analyst at MF Global.
In Japan, the No. 3 oil consumer, crude imports fell 17% in November from a year ago, the Ministry of Finance said Monday.
Meanwhile, U.S. crude inventories rose to 321 million barrels in the week ended Dec. 12, the highest level in seven months, the Energy Information Administration reported last week.
The EIA will release last week's petroleum inventories data Wednesday. Analysts expect the data to show another week of gains in U.S. crude stockpiles.
OPEC President Chakib Khelil said over the weekend that the cartel is willing to further reduce output as much as necessary to stabilize prices, the Associated Press reported.
The cartel, which controls about 40% of the world's oil production, agreed last week to reduce members' quotas by 2.2 million barrels a day starting in January. The cut, however, failed to stanch the slide in crude futures.
Natural-gas forum in focus
Energy ministers from the world's largest natural-gas exporters gathered Tuesday in Moscow to finalize the rules of their new club, the Agence France-Presse reported.
The Gas Exporting Countries Forum -- which groups Russia, the world's biggest gas producer, with other producers such as Iran, Qatar, and Algeria -- tried to put the lie to expectations that it will act as the equivalent of an OPEC for natural gas, the AFP reported.
"I emphasize that we have no intention of creating a cartel," Russian Energy Minister Sergei Shmatko said in an interview with the government daily Rossiskaya Gazeta on Monday, according to an AFP report.
With much of the U.S. in the midst of a cold snap, natural gas for January delivery rose 2.3% to $5.415 per million British thermal units in early electronic trading in New York.
In other energy trading, January reformulated gasoline rose 2.2% to 90.55 cents a gallon; it tumbled 8.6% on Monday. January heating oil added 1.3% to $1.3585 a gallon.
The national retail average price for a gallon of regular gas fell nearly a half cent to $1.659 a gallon overnight, according to auto club AAA.
Gas is 27 cents a gallon below what it was a month ago and $2.455 below where it was in July, when prices peaked at $4.114 per gallon.
