Crude-oil futures rose slightly early Thursday but held below $59 a barrel as traders awaited the outcome of the Organization of the Petroleum Exporting Countries Vienna meeting with few market players expecting any change to production quotas.
Crude for April delivery was last up 39 cents at $58.55 a barrel. On Wednesday, the contract closed slightly higher after a smaller-than-expected build in last week's crude inventories and further declines in gasoline and distillates outweighed broader market concerns about a slowdown in energy demand.
Early Thursday, Mohamed Bin Dhaen Al Hamli, the president of OPEC and minister of energy of the United Arab Emirates, said that the oil cartel is looking at the impact of the recent sell-off on the stock market on energy demand.
"We are watching developments on world stock markets, to assess their possible impact on the global economy and, in particular, on energy demand," he said.
"Also, we remain concerned about the continuing weakness of the U.S. dollar against other major currencies, notably the euro and the pound sterling, because this is having a significant effect on the purchasing power of oil-producing developing countries in many parts of the world," he said.
The market has been supported by OPEC's two recent agreements to adjust production downwards by a total of 1.7 million barrels a day, though the second adjustment is still working its way through the system, he said.
Actual cuts are estimated at about 1 million barrels so far, according to Dow Jones Newswires.
The market is also awaiting the release at 10.30 a.m. Eastern of weekly data on supplies of natural gas in storage underground. Analysts at Strategic Energy & Economic Research predict that the report will show a decline of 112 billion cubic feet for the week ended March 9. That compares to a decline of 59 billion a year ago, and five-year average decline of 79 billion, they said.
Elsewhere, United Nations diplomats are expected to present a draft resolution on new sanctions against Iran to the Security Council later today, the BBC reported. The sanctions, imposed as a penalty after Tehran refused to comply with demands that it stop enriching uranium for its nuclear program, may include a ban on the export of arms from Iran and a freeze on the assets of key Iranian officials, it said.
Western governments fear that Iran is trying to develop nuclear weapons. Tehran insists its program is aimed solely at generating power for civilian use. Elsewhere in the energy sector, reformulated gasoline futures were down 0.5 cent at $1.923 a gallon and heating oil was up 1.22 cents at $1.7212 a gallon. Natural gas rose 1.3 cents to $7.096 per million British thermal units.
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