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Oil prices up on export cut talks | |
(about 4 hours later) | |
The price of Brent crude has risen from its earlier 20-month low after reports suggested Saudi Arabia had already cut production to support world prices. | |
Brent crude rose $4.10 to $64.58 a barrel after falling as low as $58.38 during the session in London. | |
US light, sweet crude hit $68.40 a barrel, having dipped as low as $62.25. | |
Reports said Saudi Arabia had reduced its exports of oil by 900,000 barrels a day from their peak in August, with other oil producers following suit. | |
Saudi Arabia is the biggest oil exporter in the world. | |
Tim Evans at City Futures Perspective says the market is driven now by "a trio of supportive factors; a weaker US dollar, a push to the upside in global equity markets and market talk that Saudi Arabia may have already cut crude oil production." | |
Members of the Opec oil producers' cartel agreed in October to cut crude supplies by 1.5m barrels a day to boost prices, but investors had been waiting to see when the cuts would be implemented. | |
Growth worries | |
Earlier on Tuesday Brent crude fell to its lowest level since February 2007 amid concerns about the state of the US economy. | |
Oil prices have slumped since hitting a record of $147 a barrel in July, as consumers have cut their spending and the chances of a global recession have grown. | |
Credit Suisse has also cut its forecast for China's energy demand, predicting that it will remain unchanged in 2009. | |
Recent figures showed China's economic growth rate fell for the third quarter in a row, prompting fears of a wider downturn. | Recent figures showed China's economic growth rate fell for the third quarter in a row, prompting fears of a wider downturn. |
Growth slowed to an annual pace of 9% in the three months to September - down from 10.1% over the previous quarter. | Growth slowed to an annual pace of 9% in the three months to September - down from 10.1% over the previous quarter. |
There had been hopes that growth in developing nations such as China and India would help offset the slump in demand in US. | There had been hopes that growth in developing nations such as China and India would help offset the slump in demand in US. |