|Oil prices rise as Asian stocks surge|
|Stock market gains and output cut speculation lead to crude price rise.
|Updated on 29 Oct 2008 09:50 GMT
|Crude oil prices rose in Asia trading on Tuesday as shares in the region's stock markets surged and OPEC said it may reduce oil production to prevent price levels from dropping further.
WTI crude for December delivery on the New York Mercantile Exchange (NYMEX) climbed as high as $66.72 per barrel, an increase of $3.98, before dropping to $61.71 by 09:13 GMT.
Share prices in Asian stock markets increased amid speculation Japan will cut interest rates. Meanwhile, Venezuela's Oil Minister Rafael Ramirez said OPEC would "probably" lower oil production in order to avoid inventory growth.
His comments supported those made yesterday by OPEC Secretary General Abdalla Salem El-Badri, who hinted that the cartel could reduce oil production again if crude prices continued to fall.
Speaking to reporters on the sidelines of an oil conference in London, El-Badri said "We will have to wait and see how the market will react. If this problem continues then we will have another cut."
Referring to the possibility of a reduction in output before the next schdeuled OPEC meeting in Oran, Algeria, on December 17th, he said "If the situation deteriorated to the point where we had to have another meeting before Algeria we will do that.''
Adding to bullish market sentiment, the Financial Times carried a cover page article where it cited an International Energy Agency(IEA) draft report saying global crude output is falling faster than expected.
Commenting on the article today, the IEA said "This article was drafted without any consultation with the IEA. It appears to be based on an early version of a draft from several months ago that was subsequently significantly revised and updated. The numbers in the article can be misleading and should not be quoted or considered to be official IEA results. We are dismayed that such a comprehensive and important IEA report was made public without our input and verification."
In yesterday's trading session, oil prices rallied soon after the OPEC Secretary General comments before dipping again to end the day lower for the third day in succession.
Light sweet crude for December delivery on the New York Mercantile Exchange (NYMEX) settled at $62.73 per barrel at the close of business, down $0.49 on the previous day.
Meanwhile, London's Brent crude contract closed at $60.29 per barrel, $1.12 lower than Monday's settlement price.