Oil prices rose Friday as the benchmark crude contract continued to recover from a week of steep losses as worries about Iran and OPEC oil supply resurfaced.

Light, sweet crude for March delivery rose 44 cents to $58.90 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract on Thursday rose 81 cents to settle at $58.46 a barrel.

April Brent crude futures rose 55 cents to $59.34 a barrel on London's ICE Futures exchange.

Heating oil rose 1.32 cents to $1.6385 a gallon while gasoline gained 3.06 cents to $1.443 a gallon. Natural gas advanced 10.6 cents to $7.240 per 1,000 cubic feet.

Market participants reacted to comments from the Venezuelan oil minister Thursday saying the Organization of Petroleum Exporting Countries should cut output at its next meeting due to rising crude inventories.

"Everyone is building inventories _ Japan, the U.S., and that is very dangerous," said Oil Minister Rafael Ramirez. "There is an oversupply of one million barrels a day."

Ramirez said he plans to talk with other energy ministers within OPEC about cutting output ahead of a meeting in March. The cartel should cut 500,000 to 1 million barrels a day, he said.

OPEC, which pumps more than a third of the world's oil, hasn't slashed oil production since 2004, as oil prices have held near record levels.

"For OPEC countries, less than US$60 a barrel is not a suitable price _ it is quite cheap for them so they want to push the price to around at least $62-63, which may also be suitable for the consumer side," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

A leap in U.S. crude inventories to their highest level since late June had caused prices to plunge by more than $4 since the start of the week, settling below $58 a barrel Wednesday for the first time in nearly two months.

The contract rebound Thursday on worries about the possible OPEC cut, coupled with jitters about how oil-rich Iran may react to a report from the U.N.'s nuclear watchdog in the first week of March. Iran is OPEC's second-largest producer, next to Saudi Arabia.

Oil futures also rose Friday ahead of the President's Day weekend in the U.S., analysts said.

"The current rebound is because of short-covering before the holiday on Monday," Emori said. "Besides, the market had been completely oversold anyway and traders are buying back now."

This is cache, read story here

login or register to post comments