Business | Oil & Gas
Oil rises as investors anticipate Opec cut
Oil prices rose to above $47 a barrel on Monday in Asia as investors anticipated Opec will announce a large production cut at its meeting this week.
- AP
- Published: 09:02 December 15, 2008
Singapore: Oil prices rose to above $47 a barrel on Monday in Asia as investors anticipated Opec will announce a large production cut at its meeting this week.
Light, sweet crude for January delivery was up 92 cents to $47.20 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract Friday fell $1.70 to settle at $46.28.
The Organisation of Petroleum Exporting Countries, which accounts for 40 per cent of global supplyis expected to announce a substantial reduction of output quotas at its meeting on Wednesday in Algeria.
Iranian Oil Minister Gholamhossein Nozari has said Iran would push for a production cut of 1.5 to 2 million barrels per day.
Analysts have questioned whether Opec members will follow through with any announced cut.
"They're talking about a severe cut, but the question is their discipline," said Christoffer Moltke-Leth, head of
sales trading at investment firm Saxo Capital Markets in Singapore. "Unless they really surprise the market, this cut may not support the price much."
Oil has jumped from a four-year low earlier this month of $40.50 a barrel on expectations an Opec output reduction could be the catalyst to stabilize the oil price, which has fallen 65 percent since July.
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