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Oil futures rise above $32 a barrel Market doubts about OPEC output hike heightened
By Myra P. Saefong, CBS.MarketWatch.com Last Update: 2:35 PM ET Jul 18, 2000 NewsWatch Latest headlines
NEW YORK (CBS.MW) -- Oil shares rallied Tuesday while crude futures jumped above $32 a barrel, in anticipation of the latest weekly update on U.S. petroleum supplies and as fresh doubts surfaced that OPEC will follow through with a production increase.
On Monday, OPEC President Ali Rodriguez told OPEC oil-producers to be prepared to raise output by the end of the month if prices remain high.
In March, the cartel had agreed to boost oil production by 500,000 barrels per day if its basket price exceeded $28 a barrel for 20 consecutive days.
However, recent market fluctuations clouded the situation. "The OPEC basket price for crude oil fell to $27.46 on Monday, putting it back inside the $22-to-$28 target range and therefore resetting the calendar for a possible 500,000 barrel-per-day production increase," analysts at New York-based IFR Pegasus said in a daily report.
On the New York Mercantile Exchange, August crude rose $1.37 to $32.20 a barrel. The contract last surpassed the $32 level June 30.
August unleaded gasoline climbed 2.13 cents to 98.10 cents per gallon. August heating oil added 1.59 cents to 80.85 cents per gallon and August natural gas gained 10.3 cents to $4.105 per million British thermal unit.
In the equities market Tuesday, the Philadelphia Oil Service Index ($OSX: news, msgs) rose 4.1 percent to 120.19, lifted by a 4.4 percent jump in shares of Schlumberger (SLB: news, msgs), which added 3 5/32 to 75 1/2. The company posted a 71-percent rise in second-quarter profit. See full story.
The CBOE Oil Index ($OIX: news, msgs) was barely changed at 288.68. Shares of USX-Marathon Group (MRO: news, msgs) climbed 1/8 to 25 9/16 in recent trading.
Market expects rise in crude supplies
The market also was awaiting a weekly update on petroleum supplies, which the American Petroleum Institute is expected to release by 5 p.m. Eastern time.
Analysts expect the report to show that crude supplies rose between 500,000 barrels and 1 million barrels last week, according to a survey conducted by Bridge News.
And gasoline inventories are likely to have fallen by 1.5 million to 2 million barrels during the week ended July 14, the survey said.
Distillate supplies are expected to be up by 1 million to 1.3 million barrels, as refinery production capacity likely rose between 0.1 percent and 0.3 percent from the prior week's 95.5 percent.
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