Monday November 24, 07:50 PM
Oil prices soar towards 55 dollars
 |
LONDON (AFP) - Oil prices roared higher towards 55 dollars on Monday as equity markets surged on government action aimed at tackling a severe economic downturn.
Light (LIGT3.SA - news) sweet crude for delivery in January soared 4.29 dollars to 54.22 dollars a barrel on the New York Mercantile Exchange (NYMEX).
On London's InterContinental Exchange (ICE), Brent North Sea crude for January rallied 4.31 dollars to 53.50 dollars.
Europe's main stock markets on Monday closed up a massive ten percent after the US government pumped billions of dollars in ailing US bank Citigroup (NYSE: C - news) and as the Britain unveiled a mammoth financial stimulus package.
Oil prices also benefited from "the increasing prospect of an OPEC supply cut," said Nimit Khamar, an energy market analyst for Sucden brokers in London.
Iran, the second biggest producer in the Organization of Petroleum Exporting Countries (OPEC), said Monday said that output needed cutting as weak energy demand weighs heavily on prices.
"OPEC decided to cut production by 1.5 million barrels (a day from November 1) but it could not stop oil prices from falling," Iranian OPEC envoy Mohammad Ali Khatbi was quoted a saying by the Resalat daily.
"So it appears that OPEC needs to further reduce production to prevent this trend," Khatibi said.
OPEC, which pumps 40 percent of world crude, is to hold an extraordinary meeting on Saturday in Egypt amid speculation that member nations will agree to cut output again in a bid to boost plunging oil prices.
In Cairo, OPEC member Venezuela will seek a cut in production of 1.0 million barrels per day by the end of the year, Venezuelan Energy Minister Rafael Ramirez said on Sunday.
"Venezuela will propose a new cut in production at the next meeting of the Organization of Petroleum Exporting Countries," Ramirez said in a statement.
The reduction "should be effective before year's end," he added.
OPEC agreed on October 24 to reduce production by 1.5 million barrels per day from November 1 but prices have since continued to slide.
Oil prices last week slumped below 50 dollars, reaching their lowest levels for almost four years in London. They have dropped two-thirds since striking record highs of above 147 dollars in July, when fears of supply disruptions sent them rocketing.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
