Oil prices ease on talk of OPEC boost

oil pricesClick chart for more oil and other commodity prices By Ben Rooney, staff reporter


NEW YORK (CNNMoney) -- Oil prices eased Tuesday following reports that key producers are discussing the possibility of increasing output.

The Organization of the Petroleum Exporting Countries is "in consultations about a potential output increase," said Kuwait's oil minister, according to published reports.

But the minister, Sheikh Ahmad al-Abdullah al-Sabah, reportedly said that an official decision has not yet been made, and that Kuwait has not raised its output.

The benchmark U.S. oil contract, West Texas Intermediate, closed 42 cents lower at $105.02 a barrel for April delivery.

Despite Tuesday's weakness, many analysts expect oil prices to move higher in the months ahead.

Analysts at BofA Merrill Lynch Global Research said they now expect oil prices to average $122 a barrel in the second quarter of 2011, up from a previous estimate of $86 a barrel. Oil prices could briefly top $140 a barrel in the next three months, according to the BofA report.

Analysts surveyed by CNNMoney said they're sticking with their year-end forecasts. They expect the turmoil in North Africa and the Middle East to eventually subside, and lead to less volatility in the oil market.

In Europe, Brent crude slid $1.84 to $113.20 a barrel on Tuesday.

"Brent weakness can likely be traced to additional OPEC members increasing output," said Stephen Schork, an energy analyst, in his daily newsletter The Schork Report.

However, he added that the retreat "could signal weakness in consumer demand as domestic retail gasoline prices are now above the pivotal $3.50 psychological barrier."

The national average price for a gallon of regular gasoline rose to $3.517 on Tuesday, according to motorist group AAA. Gas prices, which follow crude prices, have risen for 14 days in a row.

Oil production in Libya, an OPEC member, has been curtailed by the ongoing violence between rebel forces and supporters of Moammar Gadhafi, the North African nation's long-time leader.

While some crude has shipped from Libyan ports recently, the conflict there has cut production by as much as 1 million barrels per day, according to estimates from the International Energy Agency.

Meanwhile, the U.S. ambassador to NATO said the organization has launched around-the-clock surveillance flights of Libya as it considers various options for dealing with escalating violence in the war-torn country. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.22%4.27%
15 yr fixed3.19%3.24%
5/1 ARM3.30%3.33%
30 yr refi4.23%4.29%
15 yr refi3.21%3.27%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,730.11 -27.80 -0.16%
Nasdaq 5,009.21 -3.91 -0.08%
S&P 500 2,076.78 0.00 0.00%
Treasuries 2.39 -0.02 -1.03%
Data as of 3:37am ET
Company Price Change % Change
Bank of America Corp... 17.03 0.00 0.00%
Apple Inc 126.44 0.00 0.00%
Intel Corp 30.56 0.00 0.00%
Micron Technology In... 19.07 0.00 0.00%
General Electric Co 26.78 0.00 0.00%
Data as of Jul 2

Sections

Embattled Greek Finance Minister Yanis Varoufakis has resigned his post, saying the move could help Prime Minister Alexis Tsipras reach an agreement with creditors. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

The most expensive schools in the nation are charging close to $50,000 a year in tuition and fees alone. More