BLBG: Oil Rises as Share Prices Rebound, OPEC Considers Extra Meeting
By Alexander Kwiatkowski
Oct. 28 (Bloomberg) -- Crude oil rose from a 17-month low as stocks in Europe and Asia rebounded and OPEC ministers said the group may meet again before December, raising speculation of deeper cuts in production.
Crude advanced, tracking equities, as the MSCI World Index climbed, snapping a two-day 8.4 percent drop. Europe's Dow Jones Stoxx 600 Index also advanced. OPEC's secretary-general said the group may call a meeting earlier than a scheduled December date if prices fail to react to the 1.5 million-barrel-a-day production cut it announced last week.
``The oil market is really looking at what is happening on the equities markets,'' said Hannes Loacker, analyst at Raiffeisen Zentralbank Oesterreich in Vienna. ``OPEC is already thinking again about a cut at the meeting in December or even earlier.''
Crude oil for December delivery climbed as much as $1.70, or 2.7 percent, to $64.92 a barrel on the New York Mercantile Exchange after falling as low as $61.75 earlier today. It was at $64.78 a barrel at 11:53 a.m. London time.
OPEC's decision last week to trim production for the first time in almost two years failed to stop prices falling yesterday to the lowest settlement price since May 29, 2007. Crude has fallen 56 percent since reaching a record $147.27 on July 11 and is down 32 percent from a year ago.
Deteriorating or Stabilizing?
``If circumstances dictate we have another meeting, of course we will meet,'' OPEC Secretary-General Abdalla el-Badri said today at a conference in London. He said he expects a market response to last week's production cut after about a week.
Shokri Ghanem, chairman of Libya's National Oil Corp., echoed el-Badri's comments, and said he's watching the market to see whether it's ``deteriorating or stabilizing.''
Oil was also supported by potential disruptions in supply to the U.S. from Mexico. Petroleos Mexicanos, the third-largest supplier of crude to the U.S., closed two of its oil export terminals in the Gulf of Mexico because of heavy rains and wind.
The terminals at the ports of Pajaritos and Dos Bocas shut at 4 p.m. yesterday, according to a weather bulletin on the Web site of Mexico's Merchant Marine.
Brent crude oil for December settlement gained as much as $1.48, or 2.4 percent, to $62.89 a barrel on London's ICE Futures Europe exchange. It earlier fell as much as $1.31, or 2.1 percent, to $60.10 a barrel. The contract was at $62.49 a barrel at 11:53 a.m. local time.
Premature
It could take a ``couple months'' for OPEC to implement its production cut and even longer for the affect to be seen in the supply of crude on the market, said Mike Wittner, London-based head of oil-market research at Societe Generale SA.
``If prices keep falling, I would not expect OPEC to wait two months,'' before they meet again, he said. ``But it may well be premature for them to call another meeting.''
The U.S. Energy Department will probably report tomorrow that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.
Gasoline for December delivery gained as much as 3.95 cents, or 2.8 percent, to $1.4663 a gallon in New York, and traded at $1.4639 at 12:01 p.m. in London. Heating oil climbed as much as 5.4 cents, or 2.8 percent, to $1.9925 a gallon.
To contact the reporters on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
