Singapore: Oil prices rose to $73 a barrel in Asia today, on expectations that Opec will cut production quotas at an extraordinary meeting later this week.
Light, sweet crude for November delivery rose $1.16 to $73.01 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract Friday gained $1.53 to settle at $71.38.
Chakib Khelil, president of the Organization of Petroleum Exporting Countries (Opec), said Sunday that members plan to announce a “substantial” cut at a meeting that begins 24October in Vienna.
Khelil, who is also Algeria’s energy minister, said Opec may cut output again at a meeting in December, and that the group considers the oil market oversupplied by about two million barrels a day.
Venezuelan President Hugo Chavez mentioned that he would like prices between $80 and $90 a barrel. Investors largely ignored an Opec output reduction of about 520,000 barrels a day last month, focusing instead on weakening demand.
Fears that turmoil in global financial markets will spark an economic slowdown in developed countries has helped push prices down from a record $147.27 in July.
Last week, news of rising US oil inventories, falling retail sales and slowing housing starts fueled concerns that the world’s largest economy may face a major recession that will undermine demand for crude.
In other Nymex trading, heating oil futures rose 1.65 cents to US$2.15 a gallon, while gasoline prices gained 2.44 cents to $1.69 a gallon. Natural gas for November delivery jumped 14 cents to $6.93 per 1,000 cubic feet.