MW: Oil rises first day in four after slump in previous day
Crude-oil futures rose Friday for the first time in four days as traders bought the contracts on the heels of their 9.3% slump in the previous session.
Crude for February delivery ended up $2.36, or 6.7%, at $37.71 a barrel on the New York Mercantile Exchange. Despite the gain, oil finished the week down 11%.
Futures are down more than 60% so far this year, poised for their worst year on record since crude started futures trading on the New York Mercantile Exchange in 1983, according to data collected by FactSet Research.
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.
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.
The United Arab Emirates, the third-biggest oil producer in OPEC, said Thursday it will slash crude exports by up to 15% in February, Dow Jones Newswires reported. The UAE produced 2.4 million barrels a day of crude in November, according to OPEC's monthly report.
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 6.4% to 84.40 cents a gallon. January heating oil gained 3.9% to $1.245 a gallon.
Natural gas for January delivery fell 1.4% to $5.826 per million British thermal units.
