Oil prices found their feet on Tuesday after being dragged lower the previous session by weakness in the market for crude-based products.
Benchmark Brent North Sea crude for May delivery rose to $24.43 from $24.11 -- its lowest closing level of the year. In New York, light sweet crude May futures regained 24 cents to $25.83.
Prices clawed back ground after a heavy sell-off the previous session, which traders attributed to weakness in the crude-based products, notably US gasoil and heating oil.
"Because the New York market seems a bit steadier today we're just taking a lead from that," said ABN Amro trader Terry Wilson.
Traders were awaiting stock figures published weekly by the private American Petroleum Institute (API) and were paying close attention to gasoline stocks and refinery utilisation capacity amid warnings of a gasoline shortage going into the US summer 'driving season.'
But GNI brokerage trader Robert Laughlin said recent signs had suggested that the shortage might not be as severe as first predicted.
"If you look at the refineries in the US, more and more are coming back on stream, which makes the capacity for them to produce more gasoline, so the shortage is not as bad as first thought," he said.
Analysts said that Monday's slump in crude prices could push the OPEC basket price of seven crudes worldwide below $22.
The Organisation of Petroleum Exporting Countries (OPEC) has warned that it will cut output by 500,000 barrels a day under its informal price-band mechanism if the basket price remains below $22 for more than 10 consecutive working days.
On Monday, the basket price fell to $22.53 from $22.79 on Friday, the OPECNA agency reported.
Traders said that prospects of further OPEC cuts was supporting prices. Prudential Bache trader Tony Machacek said that as the OPEC basket approaches $22 "there is a general reluctance to sell."—AFP.
©--Agence France Presse 2001.
© 2001 Mena Report (www.menareport.com)
