World oil prices rose Friday for the first time this week amid reports the United Arab Emirates will cut production in line with an OPEC output cutback decision. In thin post-Christmas trading, New York's main contract, light sweet crude for February delivery, rose to $37.71, up $2.36 from Wednesday's closing price. Markets were closed for Christmas on Thursday. The New York contract has been sliding over the past nine trading sessions. Brent North Sea crude for February delivery, which traded on London's InterContinental Exchange, was up $1.76 to $38.37 after settling Wednesday at $36.61, its lowest since July 2004. “About the only market moving news over the holiday break is that after the United Arab Emirates joined Saudi Arabia in deepening supply curbs in compliance with OPEC's recent decision to limit supply,” said Mike Fitzpatrick of MF Global. “Even though these are the deepest ever cuts attempted by the group, past attempts have only met with, at best, 80 percent compliance,” he said. UAE said it would cut output to comply with OPEC's supply curbs. The market rebounded on the production cutback news, said James Williams of WTRG Economics. “Even if the market believed in the ability of OPEC to implement its own quotas, the market remains concerned” about the sharp global economic slowdown stemming from financial turmoil, he cautioned. Last week, the Organization of Petroleum Exporting Countries (OPEC) agreed to cut output by 2.2 million barrels per day at a meeting in Oran, Algeria. The meeting came after the price of crude oil in New York plunged below $34 a barrel as the market digested news of the record cutback even before the announcement. Analysts have said that recent US data showing that the world's biggest economy remains mired in a recession was likely to keep crude oil prices under pressure in the immediate term. The price of crude oil has now collapsed by as much as 78 percent since hitting record highs above $147 per barrel in July, as a sharp global downturn has slashed the world's demand for energy. Abu Dhabi National Oil Co., the biggest producer in the UAE, will reduce oil supply to Asia in January and February, according to a statement sent to buyers. OPEC agreed to a record production cut on Dec. 17 in response to collapsing demand because of the economic slowdown. Oil also advanced because the dollar dropped against the euro. Nymex and London's ICE Futures Europe exchange, where Brent crude oil is traded, were closed on holiday. Volume in electronic trading on the exchange was 73,221 contracts, as of 3:07 P.M. in New York. Volume totaled 165,884 contracts on Dec. 24, down 66 percent from the average over the past 3 months.
