Oil futures were little changed near $40 a barrel Thursday, as traders weighed persistent worries about the global economy against the likelihood of the OPEC oil cartel cutting its production further.
Crude oil for March delivery was up 2 cents at $40.33 a barrel in electronic trading on Globex.
"Crude-oil markets still seem to be trapped within a trading range, as market anticipation about OPEC cuts -- both current and pending-- is keeping something of a floor below prices, while the upside is capped by lingering concerns over the macro situation," said Edward Meir, an analyst at MF Global.
The cartel, which controls about a third of the world's oil production, agreed at a December meeting to reduce production by a record amount of 2.2 million barrels a day starting from Jan. 1, adding to previous cuts of 2 million. Overall, the reduction is equal to about 5% of the world's oil production.
Chakib Khelil, Algeria's energy minister, said this week that there was a 50% chance of another supply cut during OPEC's next meeting on March 15.
In economic news, first-time claims for state unemployment benefits surged in the latest week to the highest level in over 26 years, the Labor Department reported Thursday.
The number of initial claims in the week ending January 31 rose 35,000 to 626,000. It's the highest level since the week ended Oct. 30, 1982.
In Europe, the Bank of England cut interest rates by a half point, to 1%, while the European Central Bank kept rates at 2%.
On Wednesday, oil prices ended lower after government reports showed crude inventories in the U.S. rose much more than expected, hitting the highest level in 18 months, and as data indicated another hefty month of U.S. job losses.
The Energy Information Administration reported that U.S. crude oil inventories increased 7.2 million barrels in the week ended Jan. 30. The buildup was much more than the increase of 2.9 million barrels expected by analysts surveyed by Platts.
Inventories at Cushing, Okla., the delivery point for Nymex crude futures, rose 2.4% to a new record high of 34.3 million barrels. The excess supplies at Cushing are causing Nymex futures to trade at a discount to Brent crude, a European oil benchmark.
Also on Globex Thursday, March reformulated gasoline rose 2 cents to $1.24 a gallon and March heating oil was flat at $1.33 a gallon.
March natural gas futures rose 6 cents to $4.66 per million British thermal units.
The EIA will release data on U.S. natural gas in storage at 10:30 a.m. Eastern on Thursday. IHS Global Insight is projecting a drawdown of 221 billion cubic feet for the week ended Jan. 30.
