Oil jumped US$1 to above US$58 on Thursday as Opec looked to trim output for the first time since 2004, and Saudi Arabia left the door open for further cuts by the end of the year if necessary.
US light crude futures CLc1 rose US$1.01 at US$58.66 a barrel at
1641 GMT, rebounding from near 2006-lows earlier in the session. London Brent crude LCOc1 climbed US$1.22 to US$60.80.
Opec ministers were scheduled to begin meeting in Qatar at 1930 GMT to formalize a cut of 1 million barrels per day, the first reduction since April 2004.
"The minimum outcome will be that we announce the 1 million barrels per day already there. How that is spread around is the main issue," Opec President Edmund Daukoru told Reuters.
"We will be selling ourselves short unless we reach an agreement and issue a clear and credible statement at the end."
Saudi Arabian Oil Minister Ali al-Naimi, Opec's most influential voice, said he supported the 1 million barrel cut and the group could reduce output even further at its next meeting in Nigeria on Dec. 14.
"There is a big possibility there will be another reduction in Abuja," he told reporters on arrival in Doha.
Ministers hope the cut will stabilize oil prices, which have fallen 25 per cent since mid-July's record high of US$78.40. But haggling between members in the last two weeks has weakened the group's influence over the market, analysts said.
"The market has been puzzled and disappointed and confused. It has not been the Opec we have come to expect," said Mike Wittner, oil analyst at Calyon investment bank in London.
Opec, which supplies a third of the world's oil, remained divided on whether to cut from actual production of 27.5 million barrels per day or from its nominal 28 million-bpd ceiling.
Saudi Arabia, the world's largest oil exporter, supported an Opec cut from actual production.
"Today there is disequilibrium between supply and demand -- we are trying to bring back the market to normal equilibrium and the price will take care of itself," Naimi said.
The Opec powerhouse has already reduced production by 400,000 bpd, Naimi said.
Opec's move comes as global fuel stocks, especially in the United States, remained at relatively high levels.
Prices fell sharply on Wednesday after US data showed an unexpectedly big build in US crude stocks, by 5.1 million barrels, pushing them further above seasonal norms and overshadowing sharp falls in fuel inventories.
Domestic distillate stocks, which include heating oil, fell a larger-than-expected 4.5 million barrels last week, while petrol dropped 5.2 million barrels, data from the US Energy Information Administration showed. EIA/S
(Additional reporting by Yaw Yan Chong in Singapore; Barbara Lewis in London and Matthew Robinson in New York)
- REUTERS
Oil jumped US$1 to above US$58 on Thursday as Opec looked to trim output for the first time since 2004, and Saudi Arabia left the door open for further cuts by the end of the year if necessary.
US light crude futures CLc1 rose US$1.01 at US$58.66 a barrel at
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