Reports of Future OPEC Production Cuts Prompt Oil Prices to Rise
NEW YORK --- Crude oil climbed more than $2 a barrel today on signs that the Organization of Petroleum Exporting Countries may cut output to stop a 50-percent drop in prices since July, Bloomberg reported.
OPEC may decrease production by 1 million to 2 million barrels a day in stages to stabilize prices, said Chakib Khelil, the group's president.
Today, crude oil for November delivery rose $2.11, or 3 percent, to $74 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange, Bloomberg reported. Prices are down 15 percent from a year ago.
"The main reason for the rise is the impending OPEC production cut,'' Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York, told Bloomberg. "It's not a question of if, but of how much they will cut production at Friday's meeting.''
OPEC, which supplies about 40 percent of the world's oil, announced this week a Vienna meeting planned for November to discuss output levels.
"OPEC is the focus,'' Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York, told Bloomberg. "We are all waiting to see what OPEC does on Friday. A 1 or 1.5 million-barrel cut looks most likely, but as much as 3 million barrels is a possibility, although done in stages.''
OPEC's 13 members produced 32.2 million barrels a day in September, according to a Bloomberg News survey of analysts and producers.
Brent crude oil for December settlement rose $1.97, or 2.8 percent, to $71.57 a barrel on London's ICE Futures Europe exchange.