LONDON – Crude oil futures (search) prices rose slightly Tuesday on concerns about the forthcoming Iraqi elections, terrorist threats to Middle East oil installations, Sunday's OPEC meeting and a potential oil-worker strike in Nigeria.
Light sweet crude for March delivery was up 5 cents at $48.86 a barrel during afternoon electronic trading in Europe in advance of the opening on the New York Mercantile Exchange (search). Heating oil for February delivery rose less than a cent to $1.4073 per gallon.
In London, Brent for March delivery was 2 cents higher at $46.03 a barrel on the International Petroleum Exchange.
Analysts said the cold spell in the U.S. Northeast was having a mixed effect on markets.
While the snowstorm has increased demand for heating oil, the freeze on transportation networks has weakened demand for transportation fuels — producing a "counter-effect" on pricing, said Esa Ramasamy of Platts, an energy reporting agency.
In Nigeria, oil unions said they would meet with Labor Ministry officials Tuesday in an effort to avert a strike in and around the southern Niger Delta oil hub of Port Harcourt after two executives from Malaysian-owned drilling firm WASCO ignored the unions' ultimatum demanding they leave the country. The managers are blamed for cutting workers' benefits.
Nigeria, an OPEC (search) member, is Africa's top oil exporter and the fifth largest supplier of crude to the United States. The threatened strike risks cutting off over 500,000 barrels per day of the country's 2.5 million barrels per day output.
OPEC ministers are scheduled to meet Jan. 30 to discuss whether additional production cuts may be necessary. Some members have suggested, however, that the current high prices might mean that the group may not cut output quotas, easing the market slightly.
Kuwait believes OPEC should maintain its oil production ceiling of 27 million barrels a day, the country's oil minister, Sheik Ahmed Fahd Al Ahmed Al Sabah said Tuesday. Sheik Ahmed, who currently holds the OPEC presidency, emphasized he was speaking in his capacity as oil minister of Kuwait.
Iranian oil minister Bijan Zanganeh said Monday that OPEC preferred to keep the price of its reference crude basket — last valued at $41.63 a barrel — below $40.
OPEC agreed in December last year to cut production by 1 million barrels a day starting this month to bring output closer to 27 million barrels a day. The group is eager to avoid an excessive stock build during the second quarter, when demand ebbs after the northern winter.