Oil prices increase on threat of more OPEC cuts
The Organization of the Petroleum Exporting Countries is likely to decide to further cut its daily oil production at its March meeting in Vienna.
Algeria's Energy and Mines Minister Chakib Khelil said the cartel is still trying to pump up prices past $40 per barrel, where they seem to have stagnated, Iran's Press TV reports.
The global economic recession has cut oil consumption so deeply that oil prices have not moved much higher than $40 in the last few months.
"It is very likely that OPEC will decide on March 15 to reduce production again to stabilize prices that are going down," Khelil said.
He also said prices would be even lower if OPEC hadn't made production cuts in the second half of 2008. In an effort to save money, OPEC members have also delayed 35 drilling projects.
"These projects are on hold and will continue to be until the price recovers," said Abdalla El-Badri, OPEC's secretary-general.
Prices also increased slightly as analysts expressed hope that the United States might extend additional aid to banks hurt by the recession, opening up investment opportunities.
Bahrain and Iran negotiate gas deal
Bahrain's Minister of Oil and Gas Affairs Abdul-Hussain Ali Mirza, who is also chairman of the National Oil and Gas Authority, said natural gas import negotiations with Iran were frozen.
The announcement followed comments from an Iranian official that appeared to be questioning Bahrain's sovereignty, the Bahrain News Agency reports.
Over the weekend an Iranian official reportedly made a comment suggesting Bahrain was part of Iran, and in retaliation Mirza ordered the Bahraini side of the joint technical committee to suspend natural gas negotiations and return from Tehran.
Monday, the Iranian government apologized for what it called a misunderstanding.
"Such negotiations cannot continue as far as there are some Iranian voices casting doubt on Bahrain's independence and Arab identity," Mirza said.
Bahrain and Iran had been negotiating a deal under which Bahrain would import natural gas from Tehran. The two nations signed a preliminary agreement in October.
India's Oil and Natural Gas Corp. makes new discovery
India's state-owned oil exploration company announced it made another discovery of oil in the hydrocarbon-rich Krishna Godavari basin.
The discovery was made in the KG-DWN-98/2 block of the basin. Oil and Natural Gas Corp. is now assessing the reserves, The Economic Times reports.
ONGC previously discovered natural gas in the same block, which is adjacent to Reliance Industries Limited's KG-DWN-98/3 block, where RIL had made the country's largest natural gas discovery.
The Krishna Godavari basin is India's largest site for major oil and gas discoveries made by RIL, ONGC and Gujarat State Petroleum Corp.
ONGC announced last month it plans to invest $5.3 billion to develop gas and oil finds in the Krishna Godavari basin with a goal of producing 25 million cubic meters per day of gas and 8,000 barrels of oil per day by 2012 and 2013.
Statoil of Norway and Petrobras of Brazil are equity partners in the block. Statoil and Cairn India hold 10 percent interest each in the block. Petrobras holds 15 percent, and ONGC holds the remaining 65 percent interest.
ONGC is also planning to drill six appraisal wells in the block.
Closing oil prices, Feb. 23, 3 p.m., London
Brent Crude oil: $40.29
West Texas Intermediate crude oil: $38.45