By Mark Shenk Dec. 15 (Bloomberg) -- Crude oil rose, touching $50 a barrel in New York, after OPEC’s Secretary-General Abdalla El-Badri said the group needs to make a “sizable” output cut at this week’s meeting in Algeria. The Organization of Petroleum Exporting Countries will probably lower production targets by at least 2 million barrels a day, or 7.3 percent, at a Dec. 17 meeting in Oran, according to 18 of 33 analysts surveyed by Bloomberg News. OPEC President Chakib Khelil said he was confident Russia will act to support the group’s reduction. “It looks like OPEC will come out with a strong statement at this week’s meeting and make significant cuts, with the assistance of Russia,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “The prospect of the cuts is causing people to rethink the market balance for next year.” Crude oil for January delivery rose $2.97, or 6.4 percent, to $49.25 a barrel at 9:27 a.m. on the New York Mercantile Exchange. Prices reached $50.05, the highest since Dec. 2. “Stocks are very high, we need to take action at this time,” El-Badri told reporters when he arrived at his hotel in Oran today. The oil market has 100 million barrels in excess stockpiles, he said. OPEC’s Request OPEC is asking Russia, the largest producer outside the group, to reduce oil output by 200,000 to 300,000 barrels a day to help revive prices, OAO Lukoil Chief Executive Officer Vagit Alekperov said in Moscow today. Oil also advanced because the dollar dropped to an eight- week low against the euro. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The dollar weakened 1.2 percent to $1.3536 per euro from $1.3369 Dec. 12. Oil gained 13 percent in the five days ended Dec. 12, its biggest weekly increase in four years, on speculation the group’s output reductions will bolster prices. “We are building on last week’s strong rally,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “The consensus is that OPEC will make a substantial cut of about 2 million barrels. We’ve also got a big selloff of the dollar, which is pulling crude higher.” Hedge-fund managers and other large speculators increased their net-long positions in New York crude-oil futures in the week ended Dec. 9, according to U.S. Commodity Futures Trading Commission data. Longs are bets that prices will rise. Brent crude oil for January settlement increased $2.83, or 6.1 percent, to $49.24 a barrel on London’s ICE Futures Europe exchange. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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