Oil prices hovered below $77 a barrel Tuesday as traders awaited corporate earnings reports for clues about the strength of the global economy and the outlook for energy demand.
By early afternoon in Europe, benchmark crude for August delivery was down 18 cents to $76.36 a barrel in electronic trading on the New York Mercantile Exchange (NYMEX). The contract rose 53 cents to settle at $76.54 on Monday.
The Organization of Petroleum Exporting Countries (OPEC) meets in Vienna on Wednesday, with most analysts expecting the producer group, the source of more than a third of the world’s oil supply, to maintain its official output target stable around $70.
Oil prices pushed toward $69 a barrel in thin trade on Monday, with sentiment buoyed by Asian and European equities and by a decision by the G20 to keep economic stimulus measures in place. Group of 20 finance leaders, who met in London on Saturday, said they would not end economic stimulus plans until the recovery was well entrenched. Traders predicted the G20’s extended financial support would translate into higher fuel demand.
Oil prices, which fell 6.5% last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the recession.
Crude oil prices slid to $67.26 per barrel on the New York Mercantile Exchange Tuesday, as U.S. stock markets closed flat for the second consecutive day.
Prices for light, sweet crude fell 98 cents from Monday’s closing price. Heating oil prices fell marginally, down 0.0176 cents to $1.7705 per gallon. Reformulated blendstock gasoline dropped 0.017 cents to $1.913 per gallon. Natural gas prices lost 0.109 cents to $3.52 per million British thermal units.
At the pump, the average price for a gallon of regular unleaded gasoline was $2.505 Tuesday, up a half cent from Monday’s $2.50 a gallon, AAA said.
Russia is poised to hold a conference in Moscow and invited OPEC representatives to take part and discuss the procedure for setting oil prices, Deputy Prime Minister Igor Sechin said during a meeting with President Dmitry Medvedev. Sechin indicated that Moscow would suggest a gradual transition to the new system of price formation, the Vesti TV channel reported Sechin as saying. He also noted that the problem of making oil reserves was becoming especially severe.
In turn, Medvedev stressed that Russia was interested in stable, predictable and fair oil prices. “We do not want extremely high prices that hurt the economic structure, and of course we do not want a significant drop in prices below their fair level,” he stated. With this in mind, OPEC and other countries will have to take steps to prevent any deepening of the crisis or further deterioration of the economic situation, Medvedev observed.
Oil rose back above $34 a barrel Friday in Asia after concerns about weakening U.S. consumer demand sent crude near five-year lows overnight.
Light, sweet crude for March delivery rose 41 cents to $34.39 a barrel by afternoon in Singapore on the New York Mercantile Exchange. The contract fell $1.96 overnight to settle at $33.98 a barrel. Investors are worried that the worst U.S. recession in decades could be deepening, and taking demand for crude down with it. Job losses are a particular concern as unemployment drags on consumer spending. The collapse in crude prices threatens to make some higher-cost fields unprofitable, which could lead producers to curtail output.