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Oil Adds 3.4%, Putting $50 Within View


MARCH 9, 2009, 10:17 P.M. ET


Oil prices jumped to a two-month high as the recent militant attack on a Nigerian oil pipeline sharpened supply concerns while the market weighs the prospects of another OPEC production cut.

But while the crude market eyes another run at $50 a barrel, persistent worries about oil demand could make it tough to hold on to such gains.

The price of light, sweet crude for April delivery rose $1.55, or 3.4%, to settle at $47.07 a barrel on the New York Mercantile Exchange, the highest since Jan. 6.

Oil continued the momentum from last week, marking an intraday high just short of $49 a barrel, as traders considered another output cut when the Organization of Petroleum Exporting Countries meets in Vienna on Sunday.

[Potential OPEC Cut Lifts Oil Prices]Getty Images 

OPEC Secretary General Abdalla Salem El-Badri

The market got a further boost earlier Monday after Royal Dutch Shell PLC was forced to halt deliveries from the Forcados export terminal following the recent militant attack on a Nigerian oil pipeline.

“OPEC is having an effect but the equity markets are a big driver,” said Kyle Cooper, director of research at IAF Advisors in Houston. “I think we’re going to be very constrained for a while — holding above $50 a barrel is going to be really tough.”

In other commodity markets:

NATURAL GAS: Prices settled at a fresh six-year low on a mild temperature outlook, expectations for weaker demand from industry and a surplus of the fuel in storage as winter’s end approaches. The April contract fell eight cents, or 2%, to $3.865 a million British thermal units.

GOLD: Prices fell under pressure from profit-taking, a stronger U.S. dollar and an earlier stock rally. Thinly traded nearby March gold shed $24.40 to settle at $917.70 an ounce on the Comex division of the Nymex. The most-active April contract fell $24.70 to settle at $918.

Write to Hyun Young Lee at [email protected]

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