OPEC Cuts Fail to Boost Oil Prices

By Chris Kahn

NEW YORK -- Oil prices wavered around $40 a barrel Monday even though OPEC appears to have slashed more than 4 million barrels of crude from production each day.

Benchmark crude for April delivery fell 13 cents to $39.90 a barrel on the New York Mercantile Exchange.

Brent crude rose 27 cents to $42.16 on the ICE Futures exchange in London.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates, said traders have mostly shrugged off OPEC cuts, seeing them as insignificant compared to a plunge in demand as millions of laid off workers stay home and companies cut back on spending.

"They're having a tough time selling oil," Ritterbusch said. "There's so much out there right now."

Analyst Addison Armstrong noted a report by Petrologistics that OPEC has successfully slashed crude oil production in an attempt to force prices higher. The total February output for the Organization of Petroleum Exporting Countries is expected to average 25.3 million barrels a day, down 4.3 million barrels a day from September, Armstrong said.

Meanwhile, the Energy Information Agency reported last week that crude inventories in U.S. storage fell unexpectedly from a 20-month high, an event that some experts saw as proof the OPEC cuts are starting to be felt around the world.

OPEC's former president, Algerian Energy and Mines Minister Chakib Khelil, told state media on Sunday that the 13-nation cartel is likely to cut further when it meets on March 15.