Energy futures rose sharply on Wednesday after Iran's oil minister said &to=http://english.pravda.ru/comp/2002/09/24/37132.html' target=_blank>OPEC should consider cutting production next month.
Light sweet crude for February delivery briefly climbed more than $2, before settling $1.66 higher at $59.82 a barrel on the New York Mercantile Exchange. The price of crude is about 16 percent below its Aug. 30 high of $70.85. Oil prices remained above $60 a barrel for months after Hurricane Katrina disrupted Gulf of Mexico oil and gas output and dipped below $60 recently amid mild winter weather in the U.S.
"The market's been down a bit lately because of the (warmer) weather," said broker Tom Bentz of BNP Paribas Commodity Futures in New York. "So I thought we were going to see a bounce, but this was much more than I expected to see today."
"The Iranian minister's comment got it going a little bit," Bentz said. He said speculators who had been expecting prices to fall even further may have contributed to Wednesday's buying by covering their so-called short positions with bets in the other direction.
January Natural gas futures reversed a three-day slide of 23 percent, rising 40.9 cents to settle at $11.431 per 1,000 cubic feet. Natural gas, which briefly topped $15 earlier this month, has been under pressure lately amid forecasts calling for mild weather in much of the U.S.
January Heating oil futures rose by 4.55 cents to settle at $1.6825 per gallon on Nymex, where January gasoline futures rose 7.77 cents to settle at $1.5911 per gallon.
The Iranian oil minister said in remarks published by the Sharq Newspaper that the Organization of Petroleum Exporting Countries should consider cutting production by one million barrels a day when it next meets Jan. 31. Kazem Vaziri Hamaneh wasn't specific on whether the reduction should be made in the cartel's actual production or its output ceiling, which is currently set at 28 million barrels per day.
"It can be said that under the present conditions the supply of oil is more than its demand", he said.
Brent crude was up $1.35 on the ICE Futures exchange, settling at $57.64 a barrel.
Analysts said sustained price gains were unlikely with weather forecasters calling for higher than normal temperatures over the next week.
According to Accuweather.com, temperatures in most of the United States apart from the Northwest will be higher than normal in the next six to 10 days.