updated from 1:21 p.m. EDT
Oil futures cleared $58 Friday as traders focused on a production drop in Norway, the world's third-largest oil exporter.
On Friday, two offshore platforms operated by
and the Norwegian division of
Royal Dutch Shell
were expected to be shut down in Norway, trimming daily output by at least 260,000 barrels for up to two weeks. Safety officials mandated the platforms be closed late Thursday because of lifeboat problems. Norway pumps 2.7 million barrels of natural gas and crude per day.
Light, sweet crude picked up 71 cents to finish trading at $58.57 a barrel. This week, the front-month contract has shed 2%. Wholesale unleaded gasoline gained 1 cent to and $1.46 a gallon and heating oil rose 3 cents to $1.71 a gallon.
Oil futures have been whipsawed in recent weeks on inventory reports, OPEC's indecision whether to shave output or not and the conflict with Iran over its nuclear program. In the U.S. Energy Department's weekly report on Thursday, stockpiles of distillates, which include heating oil, slumped by 1.6 million barrels. The drop comes right before the winter heating season, though supplies are nearly 18% above last year.
On Thursday, the front-month contract for crude closed up at $57.86 a barrel on news of the bigger-than-expected drop in distillates.
Meanwhile, the Organization of the Petroleum Exporting Countries has agreed to a daily reduction of one million barrels of crude beginning next month, but has not yet formed a consensus on how that cut will be distributed among its 11 member countries. Saudi Arabia, the largest member, has not publicly supported the move and has only said it would maintain shipments next month to Asian and European customers.
There has also been some disagreement over whether OPEC will shave production from its official quota of 28 million barrels per day or its actual production of 27.5 million barrels. They might be able to resolve the dispute at a meeting Oct. 20 in Qatar,
OPEC controls a little over a third of the world's crude and thus has immense power over where oil prices go. If the group's cut goes through, prices would likely shoot up much as they did two years ago when OPEC last reduced production. OPEC has been pumping at around 28 million barrels for nearly two years in a bid to keep the world markets well supplied and prices low.
Brimming supplies weighed on natural gas futures, which slipped 12 cents to $5.65 per million British thermal units. Inventories are 14% higher than last year and 12% above the five-year average, thanks to mild temperatures and less demand to power air conditioners or furnaces.
Energy shares were climbing from between 0.8% to 1.5% on the Amex Oil, Philadelphia Oil Service and Amex Natural Gas indices. Among drillers and refiners,
were posting the largest advances of about 3% each.
National Oilwell Varco
were leaders among oil-service firms.
Among Amex Oil Index components, only
was declining, recently down 0.01% and 0.2%, respectively.