Updated from 10:48 a.m. EDT
Crude oil futures broke above $58 Thursday after Saudi Arabia, OPEC's largest producer, said it supported trimming the cartel's production.
Light, sweet crude for delivery in November picked up 85 cents to $58.50 a barrel. Heating oil rose 2 cents $1.72 a gallon and gasoline added 1 cent to $1.48 a gallon.
The front-month contract, whose expiration Friday may inject additional volatility into trading, has been whipsawed over the past few weeks as OPEC members publicly disagreed over production cuts. The group is holding an emergency meeting in Qatar today to hammer out the details.
Saudi Arabia has been noticeably mum about the cuts, leading traders to wonder if OPEC's largest producer supported them. But the kingdom's oil minister voiced support for the move Thursday.
"We will try to make the market balanced," said Ali Naimi, according to the
Although oil prices have shed about 25% since July on little hurricane activity and brimming stockpiles of fuel, OPEC kept production the same as recently as its last meeting in September. But a plunge in oil prices below $60 pressured OPEC to hold an emergency meeting today to discuss lower output.
As it stands, the group will decrease daily output by 1 million barrels starting Nov. 1, but its members are still undecided over whether they will reduce the group's actual production of 27.5 million barrels per day or its official daily quota of 28 million barrels. The difference is more than semantics, because it means a loss of oil revenue for the countries that are asked to lower production.
Still, whatever OPEC opts to do, the move likely won't affect oil prices that much, because traders have already priced in the reduction. The dissension among the 11 member countries has spilled out in public, with oil ministers calling for opposing cuts.
American consumers will fare well despite any reduction, because domestic fuel inventories are 6% to 15% above the same period last year. Mild temperatures and little hurricane activity in the Gulf of Mexico have boosted stockpiles and helped cushion spikes in demand.
Natural gas is perhaps the best example of how high supplies are. Inventories of the fuel, which is used to heat homes and power utilities, are 13% over last year and 11% above the five-year average, according to the U.S. Energy Department's update released Thursday morning. Inventories now stand at 3.4 trillion cubic feet, up 53 billion cubic feet from last week.
Prices for the fuel increased 32 cents to close at $7.13 per million British thermal units. Cooler-than-average temperatures across much of the country will likely sap supplies over the next week.
Meanwhile, the Amex Oil Index, which tracks 13 refiners and exploration companies, was recently gaining 1.8%.
were leading advancers, up by as much as 3.4%.
Oil field company shares were gaining 3.1% on the Philadelphia Oil Service Index, with
posting the largest increases on the index.
Noble's stock was up 5.1% to $68.03 after reporting a 171% increase in net income during the third quarter. Higher day rates pushed net income to $207.2 million, or $1.51 per share. Revenue was $562 million vs. $367.2 million in the third quarter of 2005.
, one of the country's largest coal companies, saw earnings rise by a quarter to $142 million, or 53 cents per share, in the third quarter. Higher prices and volumes pushed revenues up to $1.26 billion vs. $1.22 billion a year ago.
Peabody's stock was last rising 6.1% to $43.43.