Energy Minister Sergei Shmatko said Russia will announce proposals for reducing output by Dec. 17, when the Organization of Petroleum Exporting Countries meets, Interfax reported. OPEC, which pumps more than 40 percent of the world’s oil, may reduce its output limit by as much as 2.5 million barrels a day, billionaire hedge-fund manager Boone Pickens said yesterday.
Crude oil futures for January delivery rose as much as $2.65, or 6.3 percent, to $44.72 a barrel in electronic trading on the New York Mercantile Exchange. It was at $44.18 a barrel at 12:44 a.m. London time.
Russia’s Shmatko said he had spoken on the phone to the president of OPEC and that the oil-producers’ group is preparing significant” production cuts, Interfax said. Russia is the world’s second-largest exporter after Saudi Arabia.
Oil also rose as traders bought contracts to close out bets that prices will fall further. Traders who held short positions, or bets prices would fall, are purchasing futures after oil dropped more than 20 percent in the past two weeks. Yesterday, futures fell $1.64, or 3.8 percent, to $42.07 a barrel, capping a 23 percent drop since Nov. 26.
OPEC should make a substantial” output cut when it meets on Dec. 17 in Algeria, Shokri Ghanem, Libya’s top oil official, said on Dec. 8. Oil has tumbled more than 30 percent since the group announced a 1.5 million-barrel-a-day reduction in supply on Oct. 24.
OPEC will work it back up to $100,” Pickens said in an interview in New York. It will all be determined by the global economy. If you get a recovery in the global economy, you will get it back up.”
The International Energy Agency and OPEC have lowered demand forecasts in the past month because of the economic contraction.
The Paris-based agency reduced its demand forecast by 170,000 barrels a day from its November estimate to 86.37 million barrels a day, analyst David Martin said on Dec. 5. OPEC cut its forecast for next year by 530,000 barrels a day, or 0.6 percent, to 86.68 million barrels a day, in its monthly oil market report on Nov. 17.
The IEA is likely to lower its 2009 demand growth forecast again in its monthly oil report which will be released tomorrow, said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.
China’s November crude-oil imports fell to the lowest in a year, the first decline since July. Imports fell 1.8 percent from a year earlier to 13.36 million metric tons last month, or 3.25 million barrels a day, the Beijing-based Customs General Administration of China said on its Web site today.
A government report today is forecast to show U.S. crude- oil inventories rose 1.3 million barrels last week, according to the median of 14 responses in a Bloomberg News survey. The report will probably show a drop in U.S. supplies of gasoline and distillate fuel, which includes diesel and heating oil.
The Energy Department is scheduled to release its weekly report at 10:35 a.m. today in Washington.
Brent crude oil for January settlement rose as much as $2.31, or 5.6 percent, to $43.84 a barrel on London’s ICE Futures Europe exchange. It was at $43.38 a barrel at 12:36 p.m. local time.