RTRS: Oil climbs towards $41 after OPEC supply pledge
Oil rose toward $41 a barrel on Monday after OPEC said it was willing to cut oil output further if needed to stabilize oil prices.
The market was also supported by a giant U.S. economic stimulus package that the administration of U.S. President Barack Obama is expected to get through Congress this week.
U.S. crude for March delivery rose 65 cents to $40.82 a barrel by 1323 GMT (8:23 a.m. EST). London Brent climbed 83 cents to $47.04.
"If we think we still need more action, I'm sure the conference will take more action to stabilize the market," the secretary-general of the Organization of Petroleum Exporting Countries, Abdullah al-Badri, told reporters in London.
Badri also said the 12-member group appeared to be implementing promises of production cuts more thoroughly than expected by some in the oil market with 80 percent compliance.
OPEC has said it will cut oil supply by 4.2 million barrels per day (bpd) from its level of production in September in an attempt to bolster oil prices that have fallen from a record high of almost $150 a barrel in July.
Harry Tchilinguirian, oil analyst at BNP Paribas in London, said the market was also looking ahead to the passage this week of a massive economic stimulus package to try to revive the U.S. economy.
STIMULUS
"The stimulus package is a supportive structural factor," he said. "It should begin to have an impact on the economy in the second half of this year and is an underlying element conditioning sentiment."
Top aides to President Obama on Sunday urged Democratic and Republican lawmakers to set aside political differences and quickly approve the stimulus package this week, as the world's largest economy suffers from the worst financial crisis in 70 years.
Later on Monday, the Democratic-led Senate, with the help of a handful of Republicans, was due to vote to end debate on the $827 billion plan to clear the way for its passage on Tuesday.
Oil prices fell on Friday after news of steep job cuts in the United States, where nearly 600,000 jobs were slashed last month, the most severe cut since December 1974 prompting worries of still weaker demand in the world's biggest oil consumer.
The financial malaise, which first sprang from home loan defaults in the United States, has swiftly spread to Europe and Asia, pushing a string of industrialized nations into recession.
Renewed violence in Nigeria also helped buoy oil prices. Nigerian militants attacked a gas plant operated by Royal Dutch Shell in the Niger Delta on Saturday and warned of more attacks to come, but the army said it had repelled the raid and killed three gunmen.
