By Timothy Puko And Georgi Kantchev
Oil prices were little changed Tuesday as investors considered
comments from officials in the Organization of the Petroleum
Exporting Countries.
Front-month West Texas Intermediate oil futures traded up 14
cents, or 0.3%, to $45.29 a barrel on the New York Mercantile
Exchange.
Brent crude for February delivery gained 16 cents, 0.3%, at
$48.33 a barrel on London's ICE Futures exchange.
On Monday, OPEC's secretary-general, Abdalla Salem el-Badri,
said that oil prices appear to have bottomed out and could be
poised for a rebound. But Mr. el-Badri also said that OPEC intends
to stick to its decision to keep output stable.
On Tuesday, Saudi Aramco, the state-owned oil company, said it
would postpone some projects. Its CEO emphasized Saudi Arabia "will
not single-handedly balance the market in a downturn," according to
news reports.
While some of the comments seem bearish, they may represent a
change of tone, Simmons & Co. International said Tuesday in a
research note. It is "tough to draw strong conclusions," but this
could be a sign that Saudi Arabia is at least willing to join a
coordinated response with other producers, something it had
adamantly opposed, it said.
"A lot more guys are saying these guys are going to capitulate
soon. I don't necessarily think that's true," said Kyle Cooper,
managing director of research at IAF Advisors, a Houston consulting
firm. "But there definitely is an internal battle going on."
Crude-oil prices have tumbled since midsummer and again in the
fall after OPEC decided at its November meeting not to cut its
output despite a combination of a global supply glut and lackluster
demand.
"We will review [the market at a scheduled meeting] in June and
see what we will do," Mr. el-Badri said. "You need at least six
months to see the impact."
In the short term, a rebound in prices, which have fallen around
55% since last summer, seems unlikely, analysts say.
The oil market looks fundamentally weak despite initial signs
that oil prices may be stabilizing around $47 to $51 a barrel,
analysts at Energy Aspects said. "Inventories are building and on
top of a high base which will continue to weigh on the term
structure of Brent and WTI," Energy Aspects said.
Estimating that the 93 million barrels a day global oil market
is currently oversupplied by 1.3 million barrels a day, UBS cut its
forecast for the average Brent price this year to $52.50 a barrel
from $69.75, and for WTI to $49 a barrel from $64.75.
The bank expects prices to take as long as 60 months to recover
to pre-collapse levels. As the "process of correction is clearly
under way with significant cuts to capital expenditure already
being announced," the bank sees both contracts rebounding to over
$60 a barrel next year, with Brent reaching an average price of $90
a barrel by 2018.
Nymex reformulated gasoline blendstock for February, the
benchmark gasoline contract, fell 0.8% to $1.3061 a gallon.
February diesel lost 1.72 cents, or 1.1%, to $1.6226 a
gallon.
Eric Yep contributed to this article
.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
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