Updated from 11:13 a.m. EDT
Oil futures were whipsawed Thursday as traders alternatively focused on higher fuel inventories and rumors that the Organization of the Petroleum Exporting Countries would slash production.
Light, sweet crude, the benchmark contract, ended the trading session 20 cents lower at $62.76 on the New York Mercantile Exchange. Gasoline lost 3 cents to $1.50 a gallon, and heating oil fell by 1 cent to $1.71 a gallon.
Crude prices rose as high as $64 intraday, the highest level in the past week, on reports that OPEC had hammered out an informal deal to shave production before its next meeting in December. But OPEC head Edmund Daukoru dismissed those rumors and said talks among members were still ongoing.
"I'm totally unaware of this," Daukoru told
on Thursday. "Of course, the recent prices fall is a shared concern, but consultations are still ongoing."
OPEC members agreed to keep production steady at 28 million barrels per month at their meeting last month. The group, which pumps 40% of the world's crude, next meets in December.
Oil prices rode speculation that OPEC would soon trim output to boost sluggish prices and skyrocketed nearly $2 on Wednesday. The head of OPEC has been talking with the 11-member countries about current prices and whether something should be done to shore them up.
OPEC members have intimated they would defend $60-a-barrel crude by cutting production. If they did, prices would likely shoot up.
Higher fuel inventories also helped override OPEC concerns. Gasoline supplies soared by 6.3 million barrels last week and are now 9% above the same period last year. Distillates, which include heating oil, climbed by 2.6 million barrels and are 15% above those of a year ago, the U.S. Energy Department reported Wednesday.
The standoff with Iran over its refusal to stop nuclear development remained in the spotlight and was supporting higher crude prices. On Wednesday, Iranian and European diplomats met in Berlin but did not reach a deal. Javier Solana, the European Union's foreign policy chief, said he hoped negotiations would resume next week. Thus far, Solana and Ali Larijani, Iran's chief nuclear negotiator, have met three times.
Iranian President Mahmoud Ahmadinejad said the talks had "come to some positive conclusions," according to
, although he refused to halt the country's nuclear program as negotiators had wanted.
"They asked for a one-day halt. We said we won't do it," Ahmadinejad said Thursday,
Still, it's difficult to interpret Ahmadinejad's comments, because he has a pattern of saying Iran won't negotiate its right to nuclear power and then pushing ahead with continued talks.
Earlier this week, crude prices slumped partly on reports that Iran was considering a 90-day suspension of its nuclear program. Energy traders have been following the conflict intensely because Iran, one of the world's top crude producers, has threatened to cut crude exports over the argument. Tehran maintains that it needs to enrich uranium to produce more electricity, while the West believes the move is a ruse to build atomic weapons.
Natural gas prices declined 27 cents to $5.39 per million British thermal units on high inventory levels and mild temperatures. When the weather is warm, natural-gas fired utilities use less of the fuel to generate electricity to cool or heat homes. Thanks to last year's relatively warm winter, there is 13% more natural gas in storage than in the past year and 12% more than the five-year average.
The U.S. Energy Department reported earlier this morning that natural gas supplies shot up by 77 billion cubic feet last week and now stand at 3.2 trillion cubic feet. Little hurricane activity and forecasts of a warm winter this year have also kept natural gas prices low.
With one month left in the hurricane season, a tropical storm could quickly materialize and barrel towards the Gulf of Mexico, where a quarter of the country's oil and natural gas production is located.
Energy stocks were marginally higher among refiners, drillers and oil service firms Thursday.
were rising the most on the Amex Oil Index, up as much as 2%.
was tracking 0.5% lower to $65.88 even though the company reopened the eastern half of its Prudhoe Bay oil field earlier than expected. The eastern portion is producing 100,000 barrels of crude per day and is expected to hit 150,000 barrels by Saturday.
, which also have stakes in Prudhoe Bay, both said late Wednesday they would start shipping crude from the field in October. Both companies' stocks were rising, with Conoco's inching up 0.4% to $59.32 and Exxon Mobil's picking up 0.1% to $67.18.