By Nicole Friedman
NEW YORK--Oil prices slid Monday on concerns about rising crude
inventories, while diesel prices jumped as cold weather in the
Northeast boosted demand.
Light, sweet crude for April delivery settled down $1.36, or
2.7%, to $49.45 a barrel on the New York Mercantile Exchange.
Brent, the global benchmark, fell $1.32, or 2.2%, to $58.90 a
barrel on ICE Futures Europe.
A rally in crude-oil prices halted last week after U.S. data
showed that domestic crude inventories are at their highest in
about 80 years.
"Troubles continue to grow for the U.S. crude market," Morgan
Stanley said in a weekly report, adding that U.S. data on supply
and drilling are "likely to appear ominous" in the coming
weeks.
Prices briefly spiked Monday afternoon on a Financial Times
report that the president of the Organization of the Petroleum
Exporting Countries could call an emergency meeting of the cartel
if oil prices keep falling.
The cartel's November decision not to cut its output quota sent
oil prices tumbling to multiyear lows.
However, the OPEC president is from Nigeria, a country that is
considered less powerful in OPEC and that is struggling
economically due to low oil prices. Saudi Arabia, OPEC's largest
producer, is considered the driver behind the cartel's current
strategy.
"The market is obviously just skeptical" of the report, said
Dominick Chirichella, analyst at the Energy Management Institute.
"The market is in a mode of starting to just slowly recognize that
inventories are surging."
A United Steelworkers strike expanded over the weekend, with
union workers now striking at 12 refineries that account for 19% of
U.S. refining capacity. That is threatening three-fifths of
crude-oil demand in the east of the U.S., according to industry
newsletter The Schork Report.
Libya's largest oil field resumed operations on Sunday, after a
pipeline was blown up about a week ago, and the key oil export
terminal at Zueitina in eastern Libya also restarted
operations.
Front-month diesel futures soared Monday as frigid temperatures
in the eastern U.S. boosted demand for heating oil to heat homes
and diesel fuel to use in power generators.
March diesel futures jumped 5% to $2.2179 a gallon, the highest
settlement since Nov. 28.
"Our prices here have just skyrocketed," said John Zehler,
president of Virginia Fuels Inc., a gasoline and distillate-fuel
wholesaler. "It's extremely serious."
Gasoline futures rose 0.3% to $1.6462 a gallon, the highest
level since Dec. 9.
Georgi Kantchev and Eric Yep contributed to this article.
Write to Nicole Friedman at nicole.friedman@wsj.com
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