Crude Oil Nears $54
Updated from 2:21 p.m. EST
Crude oil prices closed slightly higher Friday, edging closer to their record high of last October.
The April futures contract added 21 cents to $53.78 in Nymex floor trading, after a modest gain Thursday. Prices traded as high as $55.20 yesterday, topping the record close of $55.17 a barrel set in late October. The intraday record high -- also from late October -- is $55.67. For the week, prices rose 4.4%.
On Thursday, OPEC's secretary general said a price of $80 a barrel -- while highly unlikely -- isn't out of the realm of possibility. OPEC members agreed in December to cut production by 1 million barrels a day, effective Jan. 1, and have since vacillated on whether to endorse a second reduction. The cartel raised its official production ceiling three times by a total of 2.5 million barrels a day in the second half of 2004 as prices routinely hit record highs. The cartel next meets March 16.
Prices have surged 10% in the past two weeks amid renewed concerns about supply during a period of unusually high global demand. It has been an unusually cold winter in parts of the U.S., which has extended the peak season for heating oil.
Production outages at U.S. refineries this week added to supply concerns.
Many analysts thought the worst of the oil spike was over when prices began a steady decline from their October highs, falling close to $40 a barrel at one point. In retrospect, the price correction is similar to one last summer during which prices fell, only to spring back to new record highs.