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Oil rises towards $44, Opec expected to cut

Oil crept towards $44 on Tuesday, modestly supported by gains on other financial markets and mounting expectation that Opec would announce further output cuts at its meeting next week.

  • Agencies
  • Published: 19:07 December 9, 2008
  • Gulf News

London: Oil crept towards $44 on Tuesday, modestly supported by gains on other financial markets and mounting expectation that Opec would announce further output cuts at its meeting next week.

US crude was up 14 cents at $43.85 a barrel at 1309 GMT. On Monday, prices had gained $2.90 as they recovered from last week's 25 percent drop, which marked the biggest weekly fall in 18 years.

London Brent crude eased by 18 cents to $43.24.

"Oil is on a count-down to Opec now and everyone is expecting them to come up with something big -- probably a cut of 1-1.5 million bpd,"said Rob Laughlin, senior oil analyst at brokers MF Global in London.

"If Opec doesn't make a big cut, this market is in trouble."

The Organisation of the Petroleum Exporting Countries meets on December 17 in Algeria and is expected to reduce overall production by a minimum of one million barrels per day (bpd).

Stock markets surged on Monday as the US government cobbled together a rescue plan for stricken automakers and US President-elect Barack Obama said he would undertake the biggest infrastructure spending since the 1950s.

The White House reviewed a Democratic plan to bail out the "Big Three" automakers with $15 billion of loans.

But fuel demand could stay weak for the foreseeable future.

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