NEW YORK - Oil prices finished higher Friday on fresh speculation that major oil producers will reduce output later this month.
At the New York Mercantile Exchange, crude oil for April delivery closed up 22 cents to $27.84 a barrel. May crude gained 23 cents to $27.91 a barrel.
April gasoline rose 0.69 cent to 87.39 cents a gallon. April heating oil added 0.91 cent to 72.52 cents a gallon.
Throughout last month, the energy market was focused on two major concerns: worries that the slowing U.S. economy will lessen demand for oil, and how OPEC will respond to any drop in demand.
Oil prices trended lower throughout February as demand concerns mounted and OPEC sent mixed signals about further cutting production.
As recently as last week, top OPEC officials damped expectations for any output cut at the group's ministerial meeting beginning March 16 in Vienna. This week, the April crude-oil contract sank $1.65 Monday through Wednesday, settling Wednesday at a seven-week low. Prices recovered somewhat Thursday, and OPEC seemed to be at least trying to talk the market higher Friday.
Several people close to the cartel, which is responsible for 40% of global oil output, have told Dow Jones Newswires that OPEC ministers are mulling reducing supply further if prices continue to fall. 'If there is a continuous drift down in the price, there will be a need to cut, and people are leaning toward one million' barrels a day, a person close to the producer group said.
Analysts believe that OPEC members such as Saudi Arabia would back a cut of 500,000 barrels a day, while other members, especially Iran, Algeria, Libya, Nigeria and Indonesia, would push for a cut of 1.5 million barrels a day.
At its last meeting in January, the group reduced production quotas by 1.5 million barrels a day in anticipation that in the second quarter, when winter heating needs end, demand will drop by two million barrels a day.
Also at the Nymex, April natural gas rose 8.4 cents to $5.27 per million British thermal units.
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