Crude rallies on the last day of the week

Prices soar more than 4% on Friday as OPEC hints at production cut

Crude prices ended higher for the week that ended on Friday, 08 February, 2008. Prices ended higher by $2.81 (3.8%). Price rose and fell initially earlier in the week but the movement was restricted to one dollar or a little more than that.

Prices initially fluctuated earlier during the week due to problems in the Middle East and recession concerns in the US. But then, prices soared on the last day of the week, Friday, 08 February.

For the week ending Friday, 08 February, crude-oil futures for light sweet crude for February delivery closed at $91.77/barrel (higher by $3.66 or 4.2%) on the New York Mercantile Exchange for the day. Prices fell to $88.25 during intra day trading.

In the energy market on Friday, crude prices surged more than 4% as OPEC minister hinted at a production cut to restore back crude prices at higher level. Also, output disruptions in Northern Sea and Africa, two major oil production areas after the Middle East, continued on Friday thus pushing up prices higher.

As per the weekly inventory report by the Energy Department this week on Wednesday, crude inventories rose by 7 million barrels in the week ending 1 February, much higher than the 2.5 million barrels expected.

Last Friday, Organization of Petroleum Exporting Countries decided to keep current output levels unchanged at its meeting at Vienna. But it seems, that in its next upcoming meeting on 5 March, 2008, OPEC delegated will go for a production cut.

Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.