NEW YORK — Oil prices turned mixed Wednesday as traders took profits in the wake of Tuesday's stunning rally.
Analysts said the market opened strongly on reports that the members of the Organization of Petroleum Exporting Countries were promising to stick to agreed upon targets for prices and production, along with rumors that the cartel might hold an emergency meeting soon.
But pressure to take profits quickly took over and lasted for the rest of the day, analysts said.
On the New York Mercantile Exchange, contracts for February delivery of West Texas Intermediate, the benchmark U.S. crude, closed up 3 cents at $16.64 a 42-gallon barrel, building on Tuesday's $1.21-per-barrel gain.
But prices for refined products fell back from the big gains chalked up Tuesday.
January Contracts Fall
Contracts for January delivery of wholesale heating oil closed at 51.55 cents a gallon, down 0.42 cent after a 2.62-cents rise Tuesday.
January wholesale unleaded gasoline, which had picked up 2.88 cents a gallon in the previous session, lost 0.37 cent to close at 43.79 cents per gallon.
The market's sharp turnaround Tuesday followed weeks of declines sparked by fear that rising supplies of crude and products would continue to outstrip world demand.
Analysts said anxious traders--who had been anticipating declines to $12 a barrel or lower--eagerly embraced reports Tuesday that indicated the burgeoning glut might decline.
Will Defend Benchmark
One such report said some OPEC members were restricting their production by as much as 700,000 barrels a day. Word of new attacks on Persian Gulf tankers also stirred thoughts of possible supply restrictions.
On Wednesday, Mana Said Oteiba, the United Arab Emirates oil minister, said his country would not sell its oil at less than the OPEC-decreed price of $18 a barrel. He also said that the United Arab Emirates and other OPEC members were prepared to lower their production levels to defend the benchmark price, but he did not elaborate.
The statement helped drive the February crude contract to a high of $17.10 per barrel, said James Steel, an analyst at Refco Inc. Commodities.
"But the (refiners) did not think that was sustainable, so they took a lot of profits and that dragged us down," Steel said.