Oil prices regain ground, hover near $57

Oil prices regained ground to hover around $57 a barrel Tuesday as traders responded to a drop the day before and looked for market drivers.

Light, sweet crude for April delivery rose 35 cents to $56.94 a barrel in midmorning Asian electronic trading on the New York Mercantile Exchange. The April contract, which expires Tuesday, fell 52 cents the previous day amid expectations of rising crude stocks.

"Prices have really kicked up today but with light volume and no real drivers," said Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia in Sydney.

He suggested the rise was an exaggerated response to Monday's fall and that the market would readjust as the day progressed.

Prices for future contracts were also rising as traders anticipated an increase in gasoline demand in the approaching U.S. summer driving season.

U.S. refineries are expected to boost their crude oil runs by 1.5 million barrels per day to 16.1 million barrels daily by June to meet summer driving demand.

Following that trend, gasoline futures also jumped Monday to $1.9581 a gallon after trading as high as $1.97 — their highest level since last September.

An international energy group warned of a sharp spike in oil prices if the Organization of Petroleum Exporting Countries does not increase output.

"OPEC's complacency in Vienna has set the scene for another upward price spiral," the London-based Centre for Global Energy Studies said Monday in its monthly oil report. It warned that OPEC should raise output so refiners would have enough crude.

Late last year, OPEC member nations pledged to shore up falling oil prices by reducing their oil output by 1.7 million barrels a day. The body decided last week to not further reduce output.

In other Nymex trading Tuesday, heating oil rose 0.88 cent to $$1.6884 a gallon, and natural gas fell 1.2 cent to $6.835 per 1,000 cubic feet.

source:www.chron.com