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NEW YORK - Oil prices rose today, extending a rally of nearly 7 per cent this week as Saudi Arabia's oil minister said more production needed to be removed from the market because of high US fuel stocks.
Opec is scheduled to meet Dec. 14 in Nigeria to assess the impact of the group's recent 1.2 million barrel per day cut, decided at an emergency meeting in October.
US crude settled 30 cents higher at US$63.43 a barrel, after falling nearly a dollar earlier in the session. Prices have climbed from Monday's low of US$59.26 a barrel, bolstered by forecasts that cooler weather would stoke more heating demand in the United States.
Brent crude gained 36 to US$64.62.
The market got a boost Friday after Saudi Oil Minister Ali al-Naimi said markets were "significantly" oversupplied, a signal the Opec heavyweight may favor a further cut to output at the group's December meeting.
"Inventories in the US are high, not low ... That's why the market is out of balance," he told reporters in Cairo. "It will take 100 million barrels out of the market (to achieve balance)."
Venezuela's oil minister on Thursday said there was consensus within the Organisation of the Petroleum Exporting Countries to rein in more supply. Venezuela could propose trimming a further 500,000 barrel per day when the group gathers in Nigeria on Dec. 14, he added.
Algeria also threw its weight behind a deeper reduction.
So far Kuwait's oil minister stands alone in saying there is no need for more Opec cutbacks if prices hold near US$61 a barrel.
According to a Reuters survey the 10 Opec members with a quota reduced output in November by 785,000 bpd compared with a promised reduction of 1.2 million bpd from Nov. 1. nL01892670
Although inventories are still relatively high, an unexpected fall in US winter fuel stocks, according to data released on Wednesday, sparked a rally that took US crude to a peak of US$63.77 on Friday.
"The question as we go into December is how cold temperatures are going to be," said BNP Paribas' Harry Tchilinguirian.
Dealers were bracing for colder winter weather in the US Northeast, the world's leading consumer of heating oil, where temperatures were expected by forecaster Meteorlogix to fall to a few degrees Fahrenheit below normal by Monday.
(Additional reporting by Barbara Lewis in London)
- REUTERS
