At least one trader says April will be a key month for oil prices.
April could set the price trend for the next several months, says an oil trader for a major international oil company. Despite a production cutback announced at last month's OPEC meeting, prices remain weak.
In theory, says one trader, the OPEC cutback to 17.5 million barrels of oil per day should eliminate the surplus oil hanging over the market. However, the chairman of a major oil company reports his firm is still drawing down on its own crude inventories. If demand continues to fall, he points out, the Saudis may have to shave production more to hold prices in line.
Meanwhile, spot prices have edged a few dollars closer to the posted price - Sea crude, which had been selling at $7 to $8 below Saudi light, now is selling at $5 under. And Alaskan crude, which had been selling at $25 per barrel, now is up to $26-27 per barrel.