Updated from 1:56 p.m. EST
Crude oil prices closed higher for a second day Tuesday amid speculation that the arrival of colder-than-normal weather in the Northeastern U.S. would give prices a much-needed boost after a deep two-month correction.
The January futures contract added 81 cents to $41.82 in Nymex floor trading. Nevertheless, at current levels, prices are still down about 25% since hitting a record closing high of $55.17 on Oct. 26.
The market's correction comes amid a resurgence in U.S. production following widespread disruption to Gulf of Mexico operations from Hurricane Ivan in September. Inventory data due out Wednesday is expected to show another solid increase, adding to the recent trend.
With prices slumping, OPEC members meeting in Cairo last Friday agreed to a cut of 1 million barrels a day to the cartel's official production level of 27 million barrels a day, effective Jan. 1, but prices fell that day just the same. The cartel's members, however, are notorious for producing more than their individual quotas.
Previously, the cartel raised production on three separate occasions since July by a total of 2.5 million barrels a day, as it tried to cool the commodity's steep price appreciation.