Light sweet crude for February delivery traded 32 cents, or 0.9%, higher at $37.91 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.17 higher at $44.08 a barrel.
OPEC members are beginning to talk about cutting production quotas for a third time, even as they implement a reduction agreed to in December. Oil prices have fallen by 13% since Dec. 16, before the last cut was announced, ending below $40 a barrel on Monday, the fourth straight session of declines.
OPEC is fighting weakened demand, which has caused oil inventories to swell worldwide. Stocks at Cushing, Okla., the Nymex contract delivery point, are at a record level, and large producers and investors are hiring oil tankers to act as floating storage. The current low demand and high storage levels has caused February crude to trade at a sharp discount to outer months, a market structure known as contango that can force near-term oil prices lower.
Author:
Ksenia Kochneva
