Wednesday, March 18, 2009
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2:00:00 AM
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NEW YORK (MarketWatch) -- Oil futures rallied nearly 4% in a volatile session Tuesday to approach $50 a barrel, after a report showing a surge in U.S. housing starts offset expectations that U.S. crude inventories rose last week.
The rally came two days after the Organization of Petroleum Exporting Countries kept their production unchanged at a Sunday meeting, but pledged to fully comply with their earlier cuts.
Crude for April delivery was last up $1.78, or 3.8%, to $49.13 a barrel on the New York Mercantile Exchange. It rose as high as $49.82, but also fell nearly 2% earlier to as low as $46.53.
"The economic data and inventories expectations" were moving crude prices, said Phil Flynn, vice president at Alaron Trading. "People also expect OPEC will show better compliance."
The expiration of options on the front-month April futures contract added extra volatility to Tuesday's trading, Flynn added, as traders scrambled to cover their option positions before they expire...
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