6.4% jump in oil prices

A new supply cut announcement from the United Arab Emirates helped push crude almost $3 higher.

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By Catherine Clifford, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- Oil prices rose for the third straight session Thursday as talk of production restrictions raised supply concerns.

Crude oil for April delivery rose $2.72, or 6.4%, to close for the day at $45.22 a barrel.

"We have had a nice crescendo of bullish news here the last couple of days," said James Cordier, founder of OptionSellers.com.

However, he cautioned that it was unlikely prices would move much higher with the economy still mired in recession.

"Economic growth is still expected to be quite dismal and that is what is going to keep prices in check," said Cordier.

Prices are still more than $100 down from their peak of $147 hit in July 2008 as consumers and companies sharply reduced their energy use in the face of economic turmoil.

Production cuts: Abu Dhabi National Oil Co., the main oil supplier of the United Arab Emirates, said that it would be limiting oil supplies to Asia, according to Reuters.

"The realization that [Abu Dhabi] came up with further cuts certainly helped spur the market today," said Cordier.

And the Organization of Petroleum Exporting Countries (OPEC) is expected to cut its production quotas again at its next meeting, scheduled for March 15 in Vienna, Austria.

OPEC members produce about 40% of the world's crude and have agreed on cuts totaling more than 4 million barrels per day since last September.

Cordier said the fact that all these countries are not only announcing cuts but are adhering to them as well, is helping prop up prices.

Drivers hitting the road: A government report released Wednesday showed that supplies of gasoline fell much more than expected in the most recent week.

Stockpiles of gasoline fell by 3.4 million barrels in the week ended Feb. 20, the Energy Information Administration said.

Sinking stockpiles indicate recovering demand as consumers use more gasoline.

Even as the stockpiles of crude oil continued to build amongst sluggish demand, the significant drop off in gasoline supplies sent oil prices surging more than $2 Wednesday.

Drivers have been lured by dropping prices at the pump. In the last 11 days, the price of gas has dropped 8.4 cents or 4.2%, according to a survey of daily credit card swipes compiled by motorist group AAA.  To top of page

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