Crude-oil futures rose Friday for the first session in four as traders bought the contracts on the heels of their 33% slump this month. Crude for February delivery was last up 86 cents, or 2.5%, at $36.22 a barrel on the New York Mercantile Exchange. Despite the gain, oil is set to end the week down 14%. Oil has lost 33% so far in December, poised for its worst month on record since crude started futures trading on the New York Mercantile Exchange, according to data collected by FactSet Research. Futures are down more than 60% so far this year, also the biggest yearly loss since futures trading started in 1983. Efforts by the Organization of Petroleum Exporting Countries to stabilize oil prices have so far failed. The cartel, which controls about 40% of the world's production, decided on a cut of 1.5 million barrels a day in November. At a December meeting, it agreed to slash output by 2.2 million barrels a day. The United Arab Emirates said Thursday it will slash crude exports by up to 15% in February, Dow Jones Newswires reported. OPEC has a sketchy record of compliance, but "the price collapse has undoubtedly shocked the cartel, and could, conceivably, elicit more than the usual degree of compliance from its members," said Edward Meir, an analyst at MF Global. "Should the cartel get its act together, we could be close to bottoming out by the end of January," he added. OPEC President Chakib Khelil said recently that the cartel is willing to further reduce output as much as necessary to stabilize oil prices. Saudi Arabian Oil Minister Ali Naimi has repeated that $75 a barrel was a "fair and reasonable" price for oil. Naimi said the steep fall in prices is causing "havoc" with investment plans in oil-producing countries and jeopardizes future supplies. More evidence surfaced Friday that the world economy is slowing, putting more downward pressures on oil prices. Japanese industrial production fell 8.1% in November from a month earlier, the largest drop since the government began measuring such data in 1953, the Ministry of Economy, Trade and Industry said Friday. See full story. Japan is the world's third-largest oil consumer after the U.S. and China. The labor market in the U.S. continued to worsen in the latest week, government data showed Wednesday, with claims for jobless benefits hitting levels last seen 26 years ago. The Energy Information Administration reported Wednesday that crude inventories at Cushing, Okla., the delivery point for crude futures contracts traded on the Nymex, reached 28.7 million barrels in the week ended Dec. 19. In other energy trading, January reformulated gasoline rose 0.9% to 80 cents a gallon. January heating oil gained 1.1% to $1.211 a gallon. Natural gas for January delivery fell 1.2% to $5.842 per million British thermal units.

Source