Oil prices edged higher Tuesday, after tumbling more than $2 a barrel the previous day as traders anticipated that U.S. supply data due out this week would show rising inventories of crude.
Traders were also doubtful about OPEC’s ability to implement its plan to cut 1.2 million barrels a day of production ”” or that it would make a significant difference in oil prices.
Testu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, said that because “huge amounts of oil are available … I don’t think these cuts will have a huge impact.
“We’ll have to watch the U.S. winter,” when demand for fuel rises, Emori said. “I think the fundamentals of the oil market should be weak. I think the average price of oil will be lower next year.”
Light, sweet crude for December delivery on the New York Mercantile Exchange rose 2 cents to $58.38 a barrel in electronic trading, after tumbling $2.39 Monday.
Brent crude rose 6 cents to $58.74 a barrel on the ICE Futures exchange.
Last week, oil prices surged by $2 a barrel after U.S. Energy Department data showed a large decline in U.S. crude-oil inventories. But some analysts believe the market overreacted to the data by failing to account for the impact of a brief shutdown of the Louisiana Offshore Oil Port, through which 10 percent of all U.S. oil imports flow.
“Everybody expects a correction this week,” said Antoine Halff, an analyst at Fimat USA in New York who warned of the market’s misinterpretation of the data in a report last week.
Heating oil futures plunged to a 15-month low Monday as traders looked ahead to mild weather in the U.S.
Gasoline futures on the Nymex slipped 2 cents to $1.4275 a gallon and heating oil futures rose less than half a cent to $1.6050 a gallon. Natural gas futures declined by 9 cents to settle at $7.325 per 1,000 cubic feet.
In Nigeria, villagers who had taken over three Shell oil installations in the southern delta region vacated the facilities Tuesday after a six-day occupation.
Members of the Kula community living near Royal Dutch Shell PLC’s Ekulama 1, Ekulama 2 and Belema oil pumping stations took over the facilities Oct. 25, accusing the oil giant of failing to meet the terms of an agreement to given them preferential award of some supply and service contracts.