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Updated from 12:26 p.m. EDT

Oil prices closed lower for the third straight session Thursday, nearing $39 a barrel, in a selloff triggered by signals from a top official of the Organization of Petroleum Exporting Countries that the cartel may decide to raise its official production ceiling at a meeting next week.

The benchmark U.S. crude lost $1.26, or 3%, to $39.44. It's the second time in a week that prices have closed below $40 a barrel, after their recent peak of almost $42. Gasoline futures lost 3.4 cents, or 2.4%, to settle at $1.385 a gallon.

OPEC President Purnomo Yusgiantoro called the move an option, which could provide a psychological boost to an oil market deeply concerned about supply, according to media reports.

The comment is the closest OPEC has come to indicating whether it plans to heed the calls of oil consuming nations in the West and its own member Saudi Arabia to increase production to head off any potential damage to world economic growth.

"The market knows something we don't," said Jan Stuart, vice president of energy research at Fimat USA. "It's a pretty wild move. Either everyone and their kid brother is selling this thing, or it's technical," because tomorrow the June futures contract expires.

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Stuart added that the market may be anticipating the effect of possible OPEC moves, even though questions remain about the substance of any announced production hike.

Saudi Arabia -- the world's largest oil exporter -- has urged the cartel to increase output by as much as 2 million barrels a day. The kingdom has also said it plans to up its own output from 8.3 million barrels to 9.1 million barrels a day starting in June. Mexico has also indicated it will boost supply, but by a much more modest amount. Mexico, along with Norway and Russia, are among the world's biggest oil producers, but are not members of OPEC.

OPEC and some of its members had previously said they would not make any decisions on production until their regularly scheduled meeting in Beirut on June 3.

The production equation is somewhat cloudy because OPEC admits it is already producing about 2.3 million barrels a day more than its official ceiling of 23.5 million. There's also considerable debate among analysts as to whether any OPEC member other than Saudi Arabia can make a substantial production increase and sustain it over time. The comments from OPEC today indicated that one option was to raise the cartel's official ceiling to the actual level of current production.

Energy prices have repeatedly hit record highs on the New York Mercantile Exchange in the past month, with traders worried about tight supplies.

Persistent worries about attacks on facilities in the oil-rich Persian Gulf ahead of the peak summer driving season have kept oil above $40 a barrel for most of the past two weeks.