Oil prices climb as Saudi Arabia hints at OPEC cut
Traders also reacted to news on Monday that Iraq's main northern oil distribution centre was in flames after being struck by two mortar shells.india Updated: Nov 28, 2006 06:24 IST
World crude prices rose after oil kingpin Saudi Arabia suggested that OPEC might need to cut output further at its next meeting in December, analysts said.
Traders also reacted to news on Monday that Iraq's main northern oil distribution centre was in flames after being struck by two mortar shells.
New York's main contract, light sweet crude for delivery in January, won 62 cents to $59.86 per barrel in pit trading.
In London, Brent North Sea crude for January delivery gained eight cents to $60.11 per barrel in electronic trading.
"Prices have continued to move up... Finding support in comments by the Saudi oil minister over the weekend, warning that OPEC would cut production again at its December meeting, should the recent production cuts fail to balance the market," Barclays Capital analyst Kevin Norrish said.
The Organisation of the Petroleum Exporting Countries on October 20 approved a reduction in the group's output of 1.2 million barrels a day to stem a fall in crude prices, which have fallen from above $78 per barrel in July.
But the market has remained sceptical over how seriously the cartel will implement the decision and last week the Center for Global Energy Studies consultancy said Saudi Arabia was the sole OPEC member to have cut production in November.
The Arab newspaper Al-Hayat had meanwhile reported Oil Minister Ali al-Nuaimi's comments on Sunday.
OPEC members Nigeria, Qatar and Venezuela had already suggested that a cut was on the cards when the cartel meets in Abuja on December 14.