Oil Prices Higher in Asian Trade ahead of OPEC meet

Oil prices climbed above the 60 dollar mark in Asian trade Tuesday as the market looked ahead to a special OPEC meeting later this week to discuss production cuts, dealers said.

At 2:35 pm (0635 GMT) New York's main contract, light sweet crude for November delivery, was up 22 cents at 60.16 dollars a barrel from 59.94 dollars in late US trade Monday.

Brent North Sea crude for December added 28 cents at 61.94 dollars.

"Oil prices have been crazy. It has been see-sawing back to 60 dollars," said Tony Nunan, manager for energy risk management at Mitsubishi Corporation in Tokyo.

On Thursday, New York crude had plunged to 57.22 dollars -- its lowest point since December 2005 and a 27-percent drop from its record high of 78.40 dollars in mid-July.

Nunan said the OPEC meeting to be held on Thursday and growing concern over an expected spike in demand during the coming Northern hemisphere weather, resulted in the price rebound.

Qatar said Sunday that an extraordinary meeting of the Organization of Petroleum Exporting Countries would be held in Doha on Thursday to discuss a cut in production to check a recent slump in crude prices.

Barclays Capital analyst Kevin Norrish said the OPEC announcement "helped boost prices, fuelling expectations that the cartel would finally agree (on) the details of a production cut".

OPEC oil ministers will discuss "details of a reduction of one million barrels per day (bpd) in the cartel's effective production in an effort to check the fall in prices", Qatar's official news agency QNA said.

A one-million-bpd fall in output to 27 million bpd would in reality mean a reduction of just 500,000 barrels a day, which some member states may deem to be insufficient.

"In spite of the mixed messages over the past two weeks or so, it does look like the meeting is on," said Nunan.

But he said the market is asking will OPEC "cut production officially or not? If so, will it be an immediate action or will it be dragged out?"

He said the market also got a boost on news of a sudden cold snap in the United States.

Source: AFP

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