LONDON - Oil prices rose for the second day in a row on Thursday as several Opec ministers called for the cartel to stop producing more oil than its official target to prevent a glut next year.
US light crude CLc1 rose 59 cents to $42.53 a barrel after touching a four-month low at $40.45 on Wednesday. London’s Brent crude LCOc1 rose 98 cents to $39.67 a barrel.
The Organisation of the Petroleum Exporting Countries is gathering in Cairo ahead of a policy meeting on Friday that will decide whether to cut supplies to protect prices, which have slumped about 24 per cent since late October.
Kuwait, Venezuela, Libya, Algeria and the UAE have urged greater compliance by Opec with its output target of 27 million barrels per day (bpd) due to concerns that oil supplies are outstripping demand.
Kuwait’s oil minister also called for Opec to consider cutting output by 500,000 barrels in the second quarter of next year to counter the fall in oil demand when the Northern Hemisphere winter ends.
"I think we have to cut off all our overproduction," Sheikh Ahmad al-Fahd said. "I think we have also to cut 500,000 barrels per day from the ceiling, maybe not now but we have to decide it for the second quarter."
The group is producing about a million barrels more than its target level after boosting output to cool record oil prices that broke $55 a barrel in October.
Prices have tumbled nearly a quarter in the last six weeks as stockpiles rose and as a mild start to the US winter kept heating oil demand low.
Saudi Arabia’s Oil Minister Ali al-Naimi said he was approaching the meeting with an open mind, although on Wednesday he questioned the need for Opec to take action when the winter had only just started.
Opec’s biggest task is to gauge how aggressively it can act to bolster prices without endangering world economic growth, which is expected to slow next year.
So far oil demand has proved resilient to this year’s price surge, but some economists warn the full impact of high energy bills will not show through for another six months and a spell of lower prices would at last help protect global growth.
The chief of the US Energy Information Administration, the statistical arm of the US Energy Department, said Opec should maintain its current oil production level to help further build inventories.
Prices also were bolstered by forecasts for an Arctic blast of cold air in the United States next week that would lift demand for heating fuels.
A weekly government report showed natural gas inventories in the United States down sharply.
US government data on Wednesday also showed a smaller-than-expected increase in national distillate inventories, which include winter heating oil and diesel.
Heating oil stocks rose 100,000 barrels but remained more than 13 per cent below year-earlier levels ahead of peak winter consumption, the EIA said.
In Nigeria, villagers protesting over jobs threatened to block another 100,000 bpd of the country’s crude oil output next week if their demands are not met.
The protesters seized three oil platforms on Sunday, shutting in 120,000 bpd of output, but left the installations on Tuesday under assurances production would not restart until their grievances were addressed.