Oil prices rebounded from steep losses earlier in the week, but traders attributed the change to short-term influences and to Saudi Arabia's denial that it was boosting production. On the New York Mercantile Exchange, the near-month contract for West Texas Intermediate crude rose 32 cents per barrel from its 21-month low to close Thursday at $14.76. Among refined products traded on the exchange, wholesale unleaded gasoline rose .06 cent a gallon to 50.54 cents, and No. 2 heating oil rose .77 cent a gallon to 40.91 cents. Douglas R. Peterson, a broker at E.D.&F. Man International Futures Inc. in New York, called it a short-covering rally, meaning the rise was caused by speculators who purchased oil to cover borrowed contracts that they had sold earlier. Short-covering is an internal market influence that causes brief price rises. Others attributed the advance to official Saudi denials of expanded production by the world's largest oil exporter. There have been repeated reports that Saudi Arabia and its key Arab allies in the Organization of Petroleum Exporting Countries are sharply raising output in reaction to widespread quota cheating by other OPEC members. These reports have played a major role in the oil market's recent decline. Other rumors circulating in the market suggested the Saudis were selling more oil to pay for their multibillion-dollar weapons deal with Britain. The Saudi Press Agency said the country was the victim of an ``artificial information campaign ... by oil brokers and their agents in the market.'' ``The kingdom strongly denies the truth of such charges and wishes to reaffirm its full commitment to its assigned level of production by OPEC,'' the statement read.
