5 January 2001
Crude oil prices surge
By Robert Harris
CRUDE oil prices have surged on rumours that producers will agree to cut output by 5% of production when they next meet on 17 January.
The Organisation of Petroleum Exporting Countries (OPEC) is believed to be planning to production cut of up to 1.5 million barrels a day.
Brent crude, the world price barometer for February, has risen to $25.65/barrel, up about $2 from an eight-month low on 21 December, 2000.
The move follows a sharp drop in oil prices this winter.
OPECs benchmark crude price hit $33/barrel in the autumn, but slumped below $22/barrel before Christmas.
The crash was partly triggered by more oil being pumped last year following pressure from industrialised countries.
Lower usage this winter following milder-than-expected weather in major consuming nations, especially the USA, also contributed to the fall.
OPEC wants to cut production because it fears the price could fall further in the spring if pumping continues at the present rate.
Red diesel prices tend to mirror crude prices closely and are likely to rise after recently falling by about 3p to approximately 23.5ppl.
“The betting is on upward pressure,” said one analyst. “OPEC is likely to cut production, and cold weather is now hitting the USA.”