In Brief : OPEC Pact Cited as Oil Prices Rise
The OPEC production accord is boosting oil prices and the first-quarter profit prospects for the oil industry, analysts say.
“Oil stocks are going to do well in the first quarter because people are going to be surprised about the strength of crude oil,” said oil analyst Frederick Leuffer at C. J. Lawrence Morgan Grenfell Inc.
The optimistic first-quarter outlook comes on top of fourth-quarter profits that industry analysts say will be only slightly higher than a year ago.
They said fourth-quarter profits, to be released in about two weeks, were constrained by lower crude oil prices. The benchmark West Texas Intermediate crude oil averaged $14.67 in the fourth quarter, down $4 from a year ago.
Optimism about the strength of the November accord by the Organization of Petroleum Exporting Countries has pushed oil up to around $17.60 a barrel in the last few weeks.
OPEC pledged at its November meeting to cut production by about 4 million barrels per day to 18.5 million starting Jan. 1. The production cut is around 4 million barrels lower than the amount OPEC produced in December.