Monday February 9, 01:02 PM
Oil prices hold around $40
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LONDON (AFP) - World oil prices recovered slightly on Monday but traded within a tight range as traders doubted whether a giant US stimulus package would pull the country out of recession.
New York's main futures contract, light sweet crude for delivery in March, added 36 cents to 40.53 dollars per barrel.
Brent North Sea crude for March rose 34 cents to 46.55 dollars a barrel.
"Crude oil continues to trade around the 40 dollars level (in New York) amid doubts that the 780-billion-dollar stimulus plan in the U.S. will lead to a rapid recovery in global energy demand," said BetOnMarkets analyst Dave Evans.
"Even the prospect of further production cuts by the OPEC and strike action in Nigeria, the fifth-largest supplier of oil to the US, failed to push crude beyond its recent trading band," he added.
Prices had nosedived underneath 39 dollars a barrel in New York last Friday as a grim unemployment report stoked concerns about weak US energy (NASDAQ: USEG - news) demand.
President Barack Obama was Monday to take his case for a huge economic rescue plan directly to the US public, warning of a "catastrophe" without urgent action, as a pivotal vote loomed in the Senate.
The oil market found some support after OPEC member Iraq predicted the cartel will announce further production cuts for a market struggling with weak demand.
Over the weekend, Iraq's oil minister predicted that the Organization of the Petroleum Exporting Countries (OPEC) plans more output reductions.
"In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members," Hussein al-Shahristani said, according to his close adviser Falah al-Amiri.
OPEC recently signalled it would consider more output cuts in a bid to bolster prices.
Since last July, when oil prices hit records above 147 dollars a barrel, prices have tumbled because of weaker demand in a slowing global economy, analysts say.
OPEC announced production cuts totalling 4.2 million barrels per day late last year in a bid to defend prices and protect its members' revenues.
The cartel, which pumps about 40 percent of the world's oil, meets in Vienna next month to discuss output levels.
In Nigeria, meanwhile, the local branch of Total workers in Port Harcourt began a three-day "warning strike" on Monday to protest the kidnappings of oil workers in the restive Niger Delta.
Around 500 workers locked up Total's gate in the city, calling for an end to abductions and violence in the oil-rich region, particularly in Rivers state, an AFP correspondent at the scene reported.
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