VIENNA, Austria (AP) _ Crude oil prices hovered around $50 a barrel Tuesday as traders worried about a production cut from OPEC when the cartel gathers in Iran next month.
Prices crested amid cold spells in the United States and Europe, concerns about production shortfalls, continued high demand and the uncertainties over the strategy of the Organization of Petroleum Exporting Countries.
Light sweet crude for March delivery was up 88 cents from Friday's pre-holiday closing price at $49.23 a barrel by afternoon in Europe on the New York Mercantile Exchange. The March contract was expiring Tuesday, turning the focus to the April contract. Crude for April delivery reached $50.22 earlier in the session, but pulled back to $49.82. The May and June contracts also topped $50.
Heating oil was up nearly half a cent to $1.3908 a gallon, while Brent crude was up 65 cents on the International Petroleum Exchange, fetching $47.38 a barrel.
OPEC's wait-and-see approach has rattled traders, said Victor Shum, an analyst in Singapore for Purvin & Gertz, an energy market consulting group.
Julian Lee of the Center for Global Energy Studies in London said uncertainty over OPEC's plans is ``having an impact because the market is fundamentally tight.''
He said shortfalls from many non-OPEC producers in the past year has added to bullish sentiment, ``and on top of that, demand growth hasn't slowed down as much as some people expected it to.''
These factors, and an OPEC cutback estimated at 600,000 barrels a day for last month alone, ``have conspired to tighten the market,'' he said.
Adnan Shihab Eldin, acting secretary-general of OPEC, has said the group may cut up to 1 million barrels a day. But Nigeria and fellow OPEC member Algeria have suggested no major reductions are needed.
The president of OPEC _ who is also Kuwait's energy minister _ added his voice Tuesday to those in the organization against reducing production.
``Until now we don't have to cut, until now the price is very high and we have to respect this price and to cooperate with others for the stability of the market,'' Sheik Ahmed Fahd Al Ahmed Al Sabah said.
OPEC collectively produces more than a third of the world's crude, and its decisions on raising or lowering output can have a significant impact on crude prices, especially at a time when global demand remains robust and there's little spare supply capacity.
Shum said traders would remain on edge ahead of the March 16 meeting, but he believed there would be no actual cut in supply from OPEC if prices remained above $48 a barrel in the coming weeks.
``Just by talking and keeping people in suspense,'' OPEC could put a floor under prices, Shum said, adding that he expected crude to trade between $45 and $50 a barrel in the coming months, barring an unexpected shock.
OPEC comprises Algeria, Iran, Iraq, Indonesia, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. At present, however, Baghdad does not participate in its output pacts.