Oil up on labor contract concerns
Investors worry about possible refinery strike by 30,000 workers in the United States.
NEW YORK (CNNMoney.com) -- Oil prices rose Friday as the possibility of an oil workers' strike in the United States weighed on investors.
U.S. crude for March delivery ended trading up 24 cents to $41.68 a barrel from the day before.
The nation's major oil companies and the United Steelworkers of America - which represents about 30,000 workers at refineries, pipelines, terminals and other oil facilities - have been trying to hammer out a new labor contract.
The union's current contract is set to expire Sunday, and the union has the power to authorize a strike if needed.
"Usually these things get settled, but there is still that uncertainty going into the weekend," said Phil Flynn, senior market analyst with Alaron Trading in Chicago.
Adding to labor-related jitters, refinery workers in Britain staged an unofficial walkout this week at a refinery operated by Total SA (TOT). However the oil company said the job action has not affected production at the facility, which can process about 200,000 barrels per day.
Economy: The slowing economy, which helped drive crude prices down more than $100 a barrel from a record high of $147.27 a barrel last summer, continued to show weakness Friday.
The government said the country's gross domestic product, the sum of all goods and services produced in the U.S., fell at an annual rate of 3.8% last quarter. It was the largest drop in GDP since the first quarter of 1982 when the it contracted by 6.4%.
Investors remain concerned that the slow economy was eating away at demand for crude products. But the drop in GDP was less than the 5.5% expected by economists, according to a poll from Briefing.com.
"At least we're not in a depression yet, but the recession still looms," said Flynn.
Earlier this week, the government said supplies of crude rose by 6.2 million barrels in the week ended Jan. 26, much more than analysts had expected.
OPEC: The Organization of Petroleum Exporting Countries, whose members produce about 40% of the world's oil, has been struggling to meet a production cut of 2.2 million barrels a day in January in order to boost prices in an oversupplied market.
However OPEC is known for routinely falling short on pledged production cuts, and analysts worry it may not be able to cut the entire promised amount.