Oil gains as OPEC weighs output cut

18 October 2008

Mumbai: Crude prices rose four per cent to $73 a barrel from Thursday's  lows below $70 a barrel after the Organisation of Oil Producing Countries (OPEC) called an emergency meeting on 24 October, ahead of a scheduled 18 November meeting, to discuss ways of saving oil prices from further fall.

OPEC members are expected to discuss plans to cut production by 1-1.5 million barrels per day at the meeting, the UAE news agency WAM cited OPEC sources as saying on Friday.

Light sweet crude on the New York Mercantile Exchange rose $3.00 to $72.85 a barrel in the afternoon trade, while London Brent crude gained $2.66 at $70.50.

The WAM report from OPEC headquarters Vienna said ''a strong tendency among ministers at their meeting next Friday will be to carry out a sharp production cut of between 1 million and 1.5 million barrels per day from 1 November."

Without naming sources, the report said ''OPEC has been compelled to resort to a sharp cut in an effort to stop a further decline in oil prices.''

Crude prices slumped to a 15-month low below $70 per barrel on Thursday – less than half the peak rate of $147 a barrel reached in July - as a looming global recession heightened worries of a steep drop in global demand for oil.