The price of oil edged slightly higher in quiet trading yesterday as traders awaited news from the Persian Gulf that might move prices sharply in one direction or another.
The price of high-quality crude oil for March delivery rose 16 cents, to $22.04 a barrel, on the New York Mercantile Exchange. The February crude contract, which expired Tuesday, had finished trading at $24.18 a barrel; the lower March price reflects a later delivery date, when traders expect the situation in the Persian Gulf to be less threatening to oil supplies in the region.
The March price moved as high as $23.50 during the day, propelled by concerns about new Iraqi attacks on Israel and Saudi Arabia and by relatively poor U.S. oil supply figures released by the American Petroleum Institute after the close of trading on Tuesday.
The figures showed declines in crude imports and in stocks of distillate oil such as heating oil and jet fuel, which could reflect the military action in the Persian Gulf. But the figures also showed rising gasoline inventories, and analysts said none of the numbers indicate a shortage.
Yesterday, Energy Secretary James Watkins said he expects the price to hover between $20 and $25 a barrel for the duration of the war. Watkins said the world's oil glut was stabilizing prices, a theme echoed by others who have said the price of crude in recent days is better reflecting traditional supply and demand fundamentals rather than war psychology.