BLBG: Oil Rises From 13-Month Low as Stocks Gain, OPEC May Cut Output
By Alexander Kwiatkowski and Nesa Subrahmaniyan
Oct. 17 (Bloomberg) -- Crude oil rebounded from a 13-month low as stock markets rallied and speculation increased that OPEC may announce production cuts at a meeting next week.
Prices fell below $70 a barrel yesterday as U.S. oil inventories rose more than twice as forecast last week, and then rebounded in after-hours electronic trading as Wall Street and Asian stocks rallied. Oil also climbed after OPEC said it brought forward to next week a November meeting to discuss output levels.
``With an oil price at $70 a barrel, OPEC members will push for a cut of at least 1 million barrels a day,'' said Rob Laughlin, senior broker at MF Global Ltd. in London. ``Anything less would be worthless in terms of the current crisis in the demand outlook.''
Crude oil for November delivery rose as much as $3.17, or 4.5 percent, to $73.02 a barrel, and traded at $71.50 at 9:56 a.m. London time on the New York Mercantile Exchange.
Yesterday it fell $4.69, or 6.3 percent, to $69.85 a barrel, the lowest settlement since Aug. 23, 2007.
OPEC, which supplies about 40 percent of the world's oil, will likely reduce oil output by 1 million barrels a day at next week's meeting to check the drop in prices, Qatari Oil Minister Abdullah al-Attiyah said.
``It will be one million, or more,'' he told Qatar's Al- Jazeera television channel. ``Prices have fallen a lot and we need to take measures.''
OPEC Supplies
OPEC oil supplies fell 3.8 percent in September to 31.8 million barrels a day, according to revised data from Geneva- based consultants PetroLogistics Ltd. The amount declined from 33.05 million barrels in August because of lower sales by Saudi Arabia and Iran, company founder Conrad Gerber said by e-mail yesterday.
Preliminary estimates from PetroLogistics had indicated a reduction in September supply of 2.4 percent to 32.6 million barrels a day.
Oil prices also rose as stock markets rallied in Europe and Asia, driving the MSCI World Index to its biggest weekly gain since 2003, on a possible government plan to bailout U.S. bond insurers. The index added 1.4 percent to 949.99 at 8:05 a.m. in London as all 10 industry groups increased.
U.S. crude oil supplies rose 5.6 million barrels to 308.2 million barrels last week, the Department of Energy said in a weekly report yesterday. Crude oil inventories were forecast to rise 2.6 million barrels, according to the median of analyst estimates in a Bloomberg News survey.
Brent crude oil for December settlement rose as much as $2.76, or 4.1 percent, to $70.60 a barrel on London's ICE Futures Europe exchange. It was at $69.27 a barrel at 9:34 a.m. London time.
To contact the reporters of this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netNesa Subrahmaniyan in Singapore at nesas@bloomberg.net;
