Business | Oil & Gas
Oil rises by $3 as further cut by Opec is considered
Oil rose by more than $3 (Dh11.01) a barrel on Monday as investors considered the prospect of a further Opec supply cut and as stock markets rallied following the US government rescue of US bank Citigroup.
- Reuters
- Published: 10:49 November 24, 2008
London: Oil rose by more than $3 (Dh11.01) a barrel on Monday as investors considered the prospect of a further Opec supply cut and as stock markets rallied following the US government rescue of US bank Citigroup.
Venezuela said on Sunday the Organisation of Petroleum Exporting Countries should cut supply further, while Iran made similar remarks yesterday. Opec oil ministers meet for informal talks in Cairo on November 29.
"The demand scenario suggests we need another cut. But at the end of the day, there is a certain scepticism in the marketplace that Opec is going to deliver at this weekend's meeting," Rob Laughlin, broker at MF Global, said.
US crude rose $3.42 to $53.35 by 1550 GMT. The contract had dipped to a three-and-half-year low of $48.25 on Friday. Brent crude was up $3.22 at $52.41.
Rising equities, following the bailout of Citigroup, and increased demand for winter heating fuel in northwest Europe also boosted oil, traders said. The UK's FTSE 100 index gained almost 5 per cent.
The US dollar weakened against a basket of other major currencies, also supporting crude. Dollar weakness can increase the appeal of oil and other commodities as an investment.
Oil has plummeted nearly $100 a barrel since its record high of $147.27 in the summer.
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