Oil Prices Remain Under $58 a Barrel

Traders work in the crude oil pit at the New York Mercantile Exchange in New York, Monday, Oct. 9, 2006. Oil prices rose Monday on growing expectations that OPEC is plotting its first output cut in nearly two years. (AP Photo/Seth Wenig) (Seth Wenig - AP)

SINGAPORE -- Oil prices held steady early Thursday after settling at their lowest level this year in the previous session, and ahead of a weekly U.S. petroleum supply snapshot expected to show crude stocks rose.

Light, sweet crude for November delivery fell 8 cents to $57.51 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract fell on Thursday by 93 cents to settle at $57.59 a barrel _ the lowest settlement since Dec. 19, as doubts grew that there is a consensus within OPEC for an immediate output cut.

Since July, the cost of crude oil has plunged by more than $20 amid rising global inventories, concerns about slowing economic growth and a milder-than-anticipated hurricane season.

Against this backdrop, the president of the Organization of Petroleum Exporting Countries, Nigerian oil minister Edmund Daukoru, says there is a need _ and an agreement _ to cut production by 1 million barrels a day starting next month. Daukoru said Wednesday that a new cut has been agreed to and that members were "nearing consensus" on how to apportion the cuts.

But Saudi Arabia, the country whose participation is necessary to make any significant output reduction, has not publicly confirmed this.

The last time OPEC trimmed its output _ by 1 million barrels a day _ was December 2004 when oil traded slightly above $40 a barrel. That caused an immediate spike in prices.

Also adding a downward pressure on prices were expectations that a weekly fuel inventories report to be released Thursday by the U.S. Energy Department would show gains in domestic crude oil and distillate stocks.

Crude oil inventories are expected to gain by about 500,000 barrels, while stocks of distillates, which include heating oil, are forecast to gain by about 400,000 barrels a day, according to a Dow Jones Newswires survey of analysts.

Gasoline inventories are seen falling by about 600,000 barrels, according to the analysts' average.

In other Nymex trading Thursday, heating oil futures gained 0.3 cent to $1.675 a gallon while gasoline prices rose 0.19 cent to $1.4522 a gallon. Natural gas prices rose 3 cents to $6.18 per 1,000 cubic feet.