Updated from 10:50 a.m. EST
Crude oil futures rebounded from early weakness Friday as traders focused on the rising possibility OPEC will again trim production at its next meeting this month.
OPEC President Edmund Daukoru affirmed growing speculation the Organization of the Petroleum Exporting Countries will have to slash output at its meeting later this month to shore up prices.
"There is likely to be some further trimming, the actual amount will depend on the circumstances," Daukoru told
Light, sweet crude was last gaining 30 cents to $63.43 a barrel on Nymex. Earlier in the day, oil was trading as low as $62.24 a barrel as traders took profits and the country's factory activity fell to a three-year low.
The Institute for Supply Management's manufacturing index dropped to 49.5 in November, down from 51.2 in October. Analysts had expected activity to come in at 52 last month. Factory activity last fell below 50, the demarcation between an expanding or contracting manufacturing sector, in April 2003. A contracting sector could mean slowing economic growth and reduced demand for energy.
On Thursday, the January contract hit a two-month high of $63.13 a barrel on cold weather, drops in fuel stockpiles and rising speculation that the Organization of the Petroleum Exporting Countries will trim production again.
The cartel agreed to trim output last month by 1.2 million barrels, though the U.S. Energy Department and analysts believe actual production has dropped by less. In its monthly oil market report, the federal agency said OPEC has only slashed exports by less than 800,000 barrels per day because it doesn't want to forsake millions in oil revenue.
But prices have not reacted as well as OPEC countries had hoped, and crude oil, until this week, had been trading between $58 and $61 a barrel. (The group decreased production when oil prices fell below $60 in October.) That means the cartel will likely reduce exports further when it next meets Dec. 14 in Nigeria.
Saudi oil minister Ali al-Naimi blamed high U.S. fuel supplies for lower oil prices and said the oil market could be "balanced" by reducing worldwide oil production by 100 million barrels, according to
. He did not say, though, if OPEC would reduce output later this month.
The Algerian and Venezuelan oil ministers both said Thursday a cut was increasingly likely, with the Venezuelan putting the reduction at 500,000 barrels per day. OPEC President and Nigerian oil minister Edmund Daukoru seconded those thoughts Friday when he said he didn't "expect anything less" than a 500,000 barrels cut, according to
In the future, it may be more difficult for OPEC to wrangle control of oil prices as it accepts more members. On Thursday, OPEC said Angola would join the 11-member group and Sudan may as well. There was no schedule given for their acceptance, though.
Heating oil was shedding 1 cent to $1.84 a gallon and wholesale unleaded gasoline was picking up 1 cent to $1.68 a gallon.
Natural gas, which was last slipping 39 cents to $8.45 per million British thermal units, has been volatile this week. On Wednesday, the fuel closed at a nine-month high of $8.87 per million British thermal units as a cold front moved across the country, dropping temperatures and boosting heating demand. Cold weather is expected to reach the Northeast by Saturday, though it likely won't last beyond next week.
Prices will probably remain choppy until there is sustained cold weather. As it is now, mild temperatures are forecast for much of the country by the middle of December, according to the National Weather Service.
Crude's decline was hitting energy shares, with drilling and refining stocks off 0.2% as measured by the Amex Oil Index.
were leading decliners.