Oil Prices Rebound in Asian Trading

A gas station associated with the Terror Free Oil Initiative opened for business Thursday, Feb 1, 2007, in Omaha, Neb. The groups objective is to encourage Americans to buy gasoline that originated from countries that do not export of finance terrorism. (AP Photo/Dave Weaver) (Dave Weaver - AP)

SINGAPORE -- Oil prices rebounded slightly in Asian trading Friday amid continued cold weather in the United States, a major consumer of heating oil and gasoline, and as traders watched for signs that OPEC members were cutting output.

Light, sweet crude for March delivery rose 8 cents to $57.38 a barrel in electronic trading on the New York Mercantile Exchange, midmorning in Singapore.

"The cold weather in the U.S. seems like it will last for a while, and prices have moved up the range," said Ken Hasegawa, of Tokyo brokerage Himawari CX.

On Thursday, the contract ended at $57.30 a barrel after rising as high as $58.86, the highest level for a front-month contract since Jan. 3.

Oil prices have climbed nearly 14 percent since touching a 20-month low of $49.90 a barrel Jan. 18. The advance has been triggered by the arrival of cold weather in the U.S. Northeast, the nation's main heating oil consuming region.

A winter storm rushed across the U.S. Southeast Thursday, grounding flights a day after coating roads with deadly ice in the Midwest. Analysts expect continued colder-than-normal temperatures to boost natural gas and crude oil prices in the near term.

Expectations that the Organization of Petroleum Exporting Countries will tighten their spigots further are also likely to shore up prices.

The Wall Street Journal reported this week that Saudi Arabia has advised its customers of its impending 158,000 barrel a day output cut effective Feb. 1. The reduction is part of a December agreement by OPEC to cut output by 500,000 barrels a day on top of an earlier production cut of 1.2 million barrels a day.

With the shift in market sentiment, prices are more likely to strike $60 a barrel than head back toward $50 a barrel, said John Kilduff, senior vice president at New York brokerage Fimat USA.

In other Nymex trading, heating oil futures fell 0.12 cents to $1.6577 a gallon, while natural gas prices increased 8.8 cents to $7.618 per 1,000 cubic feet.