The group will trim production by 2 million barrels a day at the beginning of next year, Saudi Arabian Oil Minister Ali al-Naimi said today. Russia and Azerbaijan said they may join OPEC to reduce supply as recession cuts global energy consumption next year. Commodities also gained as the dollar fell to a 13-year low against the yen.
Crude oil for January delivery rose 35 cents, or 0.8 percent, to $43.95 a barrel on the New York Mercantile Exchange at 1:47 p.m. London time. That’s the first increase in four days. Prices swung between a gain of as much as 4.4 percent and a 2.3 percent loss.
Prices have tumbled 70 percent from a record $147.27 on July 11 as the global economy crisis tips oil consuming countries into recession. Global demand will fall for the first time since 1983 next year, the International Energy Agency said.
The Organization of Petroleum Exporting Countries’ rate of compliance with a previous output cut is more than 85 percent, al-Naimi told reporters today in Oran, Algeria, before a ministerial meeting that will decide production quotas.
Russia, the largest non-OPEC producer cut oil production 350,000 barrels a day in November and may trim output further in collaboration with OPEC as market conditions require, Deputy Prime Minister Igor Sechin said at the meeting. Azerbaijan is willing to contribute a supply cut of as much as 300,000 barrels a day, Azeri Energy Minister Natig Aliyev said in Oran.
U.S. crude-oil and fuel supplies have climbed as the recession crimps demand.
Crude inventories probably rose 600,000 barrels last week, according to the median of 11 responses in a Bloomberg News survey conducted before an Energy Department report today. The report will probably show that stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, also increased.