Oil prices rose Tuesday as traders weighed production cuts by OPEC against a deteriorating global economy that they expect to push demand, and prices, even lower.

Light, sweet crude for March delivery rose 61 cents to $40.69 a barrel on the New York Mercantile Exchange.

Production cuts by OPEC may be all that is supporting prices right now, but supply issues no longer dominate the market as they once had. Falling demand will push crude closer to the $30 range, said Addison Armstrong, director of market research at Tradition Energy.

“We have really bleak prospects for our economy right now,” Armstrong said.

The Organization of the Petroleum Exporting Countries promised last year to cut crude production by 4.2 million barrels a day. OPEC in the past has cheated on announced production cuts to keep oil money flowing, but so far that hasn’t happened to the degree that was expected, Armstrong said.

The United Arab Emirates and Qatar plan to reduce shipments of crude to Asia in March. Saudi Arabia also has reduced January output by 375,000 barrels a day, and an Iranian oil minister said flagging demand could lead to further production cuts.

Still, signs that the world’s biggest economies are struggling means that demand for oil will weaken, he said.

China reported Monday that some 20 million workers have lost their jobs, while Hong Kong-based brokerage CLSA published a survey that said Chinese manufacturing shrank in January for the sixth consecutive month.

The same thing is happening in the U.S. The government recently reported that the economy slowed nearly 4 percent last year and that that slide could accelerate at the beginning of this year.

That has led to growing inventories of unwanted crude with industries cutting production and drivers cutting their miles on the road. A report Tuesday by the American Petroleum Institute, the industry’s trade association, is expected to show that oil stocks rose 2.9 million barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

U.S. Energy Department’s Energy Information Administration reports its inventory data on Wednesday.

The data is expected to show that US crude inventories rose by 2.5 million barrels in the week ending January 30, according to a Thomson Reuters poll of analysts.

Oil stocks have grown more than 20 million barrels in the last four weeks, evidence the nation’s worst recession in more than 25 years may be deepening.

Refiners are buying much less crude with demand for their products like gasoline falling. That has led to rising gas prices even with the price of oil near five-year lows.

At the pump, the average retail price for a gallon of regular gasoline rose a penny to $1.89 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That’s 23.2 cents a gallon more than a month ago, though still $1.087 below gas prices a year ago.

Oil prices have fallen about 72 percent since peaking at $147.27 a barrel in mid-July as a financial crisis in the U.S. subprime mortgage sector mushroomed into the worst world economic slowdown in decades.

“I think the world is underestimating the power of this recession,” said Christoffer Moltke-Leth, head of sales trading for Saxo Capital in Singapore. “It’s still unfolding. It could be really, really ugly.”

Moltke-Leth said he expects oil to fall to as low as $28 a barrel by the end of March, as the U.S. — the world’s largest crude consumer — continues to struggle.

Millions have lost their jobs in the U.S., and spending on gasoline and cars has tumbled.

Chrysler LLC sales chief Steven Landry said Tuesday that U.S. industry sales could drop as much as 35 percent in January to the lowest rate in 25 years. General Motors Corp. said it will offer buyouts to all of its hourly employees as the troubled automaker continues to slash costs.

The Federal Reserve on Tuesday extended key programs intended to relieve the credit and financial problems that have deepened the recession. The central bank says it is taking the action “in light of continuing substantial strains in many financial markets.”

In other Nymex trading, gasoline futures dropped 2.26 cents to $1.1266 a gallon, while heating oil fell a penny to $1.3319 a gallon. Natural gas for February delivery fell 10.8 cents to $4.449 per 1,000 cubic feet.

In London, the March Brent contract rose 20 cents to $44.02 on the ICE Futures exchange.