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Associated Press
Oil Prices Edge Toward $50 a Barrel
Monday November 22, 6:36 am ET
By Jane Wardell, AP Business Writer
Oil Prices Make Fresh Assault on $50 Barrel Mark As Winter Supply Fears Flare Anew

LONDON (AP) -- Crude oil futures edged up toward $50 a barrel Monday amid renewed fears over winter supplies.
Light sweet crude for delivery in January traded at $49.49 a barrel at midday in Europe, up 60 cents from the contract's closing price Friday on the New York Mercantile Exchange.

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Monday's rally extended Friday's run-up when the price jumped more than $2 a barrel, settling above $48, on concerns about tight winter fuel supplies mixed with speculation that the Organization of Petroleum Exporting Countries may scale back output.

The January futures contract for Brent crude was also driven higher Monday, fetching $45.44 a barrel, a rise of 55 cents since its close on Friday.

Analysts said prices were likely to remain higher ahead of the U.S. Thanksgiving holiday on Thursday and expectations that data scheduled for release on Wednesday will show lower levels of U.S. heating oil distillate stocks.

Heating oil was up at $1.4895 per gallon on the Nymex.

"I think that the focus right now ... is how are things going to be over the winter months," said Sam Dale, bureau chief at Energy Intelligence in Singapore.

Dale cautioned that the market remained driven largely by shifting sentiment rather than underlying fundamentals. Hedge funds were also active, exacerbating the swings in energy costs, he said.

Even after Friday's uptick, Nymex crude futures are more than $5 cheaper than the peak closing price of $55.17 set twice in late October. Oil prices would have to surpass $90 per barrel to meet the inflation-adjusted peak set in 1980.

Traders said there were also renewed concerns about the intentions of OPEC, whose members gather Dec. 10 to assess their supply commitments.

Representatives for Iran and Venezuela last week suggested that a cut in output may be necessary to prevent oil prices from plummeting. Commitments by OPEC to pump up their collective supplies in recent months have been one of the factors that helped bring prices off their highs.

Over the weekend, violence continued to flare in Iraq, while Russian authorities were reported to have searched the homes of dozens of managers working for the embattled Yukos oil company.

Jitters over both oil-producing areas have served to spur increases in recent months, but Dale said their impact was less evident in Monday's session.

In Russia, the Interfax news agency quoted an unidentified Yukos board member as saying that dozens of Yukos managers in Moscow and across Russia have been targeted in a far-ranging official investigation, and many of them have had their homes searched at night.

Associated Press Writer Jake Lloyd-Smith in Singapore contributed to this report.