KEY POINTS:
Oil prices rose to above US$60 on Monday after Opec kingpin Saudi Arabia said the group could trim supplies again in December and militants attacked a Nigerian oil facility.
Saudi Arabian Oil Minister Ali al-Naimi said Opec will take further action at its Dec. 14 meeting if the
oil market remains unbalanced.
US crude was up 87 cents to US$60.01 a barrel by 1916 GMT. Prices ended US$1.26 higher on Friday after the US consulate in Nigeria said militants may have imminent plans to launch attacks on oil facilities in the Niger Delta.
London Brent crude was up 65 cents to US$59.80.
"We will look at the numbers, we will assess the market, if it is out of balance we will take some more action," Naimi told reporters, adding inventories remained high.
"The market is not in balance," he said.
Opec agreed to cut output by 1.2 million barrels per day (bpd) last month to stop a 25 per cent slide in oil prices since mid-July, caused in part by bulging US stocks.
"When the Saudi oil minister says there may be another cut necessary, the market listens," said Phil Flynn, analyst at Alaron Trading.
Oil prices have now been trading in a US$57-US$62 range for a month, leading some investors to see firmer prices on the horizon.
An oil production facility at Tebidaba, in southern Nigeria, was attacked early on Monday, government and security sources said. The Tebidaba region feeds crude oil to the Brass tanker terminal, which exports about 200,000 barrels per day.
Violence in the world's eighth-largest exporter has cut output by 500,000 bpd since February.
Another factor supporting the price is a blast of cold weather that hit the US Northeast at the weekend and boosted heating oil prices in New York by more than 3 cents a gallon on Monday.
Opec President Edmund Daukoru said on Sunday that all the group's members will fully implement their production cuts, while market conditions may force the Organisation of the Petroleum Exporting Countries to cut output further next month.
"A December quota cut may be necessary because the market is still soft," Daukoru told Reuters in South Korea ahead of an oil conference. "Sixty dollars will not hurt the world economy."
Price hawk Venezuela is recommending Opec take an additional 300,000 barrels per day off the market at its December meeting.
Some analysts doubted that Opec would be able to lift the price soon.
"We see front-month WTI (US) crude prices continue to remain rangebound in the high fifties for the coming week, as bulging crude inventories and perceived lack of coordination from Opec weigh in on the market," said analysts at JP Morgan.
- REUTERS