U.S. News

Likely OPEC Cut Drives Oil Higher


World oil prices surged after the Organization of Petroleum Exporting Countries signaled it would slash crude production by 500,000 barrels per day from February next year.

OPEC is to lower its production from Feb 1, 2007, Algerian Energy Minister Chakib Khelil said on Thursday during a meeting of the cartel in the Nigerian capital of Abuja.

New York's main contract, light sweet crude for delivery in January is It earlier jumped as high as $62.72 in electronic trading.

Dealers said prices were supported also by Wednesday's news that US energy inventories had fallen across the board last week.

OPEC, whose members produce about one third of global oil supplies, had decided in October to cut their output by 1.2 million bpd to 26.3 million in a move aimed at boosting prices.

Analysts have warned that a further cut to the production target risks sending oil prices sharply higher in the coming months, which would worsen an already cloudy outlook for the global economy next year.

Meanwhile, Angola has won the backing of existing OPEC members to join the organization, Qatari Energy Minister Abdullah bin Hamad al-Attiyah said after the cartel's meeting.

The second-biggest oil producer in sub-Saharan Africa will become a member on March 1, he added.