LONDON (SHARECAST) - Oil prices rose Monday after an OPEC official said the oil cartel should cut production, according to media reports.
There is increased speculation that OPEC will slash production at its emergency meeting in Vienna this Friday amid weakening demand and falling prices. Analysts are predicting the cartel, which controls two-thirds of the world's oil supplies, is considering a cut of up to 1.5m barrels per day.
Last month OPEC’s decision to cut output by around 520,000 barrels a day failed to boost prices.
Since then there have been mixed views on which way oil prices will now go with some analysts predicting further falls and others arguing that crude has recently been oversold. The recent recovery on global markets, as panic settles, should help bolster confidence in the oil market, some analysts believe.
Crude’s rise on Monday was also partly fuelled by the continued recovery on Wall Street with the Dow settling back above the 9,000 mark as investors cheered comments from Fed chairman Ben Bernanke and upbeat economic news.
Crude for November delivery settled $2.40 higher at $74.25 a barrel on the New York Mercantile Exchange.
Among precious metals gold snapped its seven session losing streak as it tracked another rise in oil prices and as heavy fund selling out of gold into cash started to reduce as relative calm returned to stock markets.
Gold for December delivery rose $2.30 to settle at $790 an ounce on the Comex division of the New York Mercantile Exchange.
Bigger gains for the yellow metal were capped as the dollar strengthened against major currencies.
Silver for December rose 36 cents to $9.69 while copper slipped 6 cents to $2.12.
