GEORGE JAHN

Tuesday, February 19, 2008

VIENNA, Austria — Oil, heating oil and gasoline prices spiked Tuesday as investors eyed the possibility that OPEC may cut production just ahead of the second quarter, when gasoline demand in the Northern Hemisphere usually becomes the central focus of the market.

An explosion at a 70,000-barrel-a-day refinery in Texas may have also boosted prices, but the primary worry is that the Organization of Petroleum Exporting Countries may reduce output next month to support prices in a $85 to $100 (U.S.) a barrel range, said Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo.

The U.S. Energy Department, the International Energy Agency and OPEC have all cut demand forecasts for this year.

OPEC wants “take it as a more supportive factor to make further production cuts, even though the price is going higher,” he said. “They don't care about the supply-demand balance, what they want to do is hold the price level.”

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