Oil prices gained 50 cents a barrel in morning trading in London on Friday after a top OPEC official had said that members of the oil-exporting group were in agreement to cut output if prices remain low.
Benchmark North Sea Brent crude for delivery in February climbed to 25.85 dollars a barrel from 25.35 dollars at the close on Thursday.
In New York, the reference light sweet crude February contract closed up 14 dollars at 28.14 dollars overnight.
Prices advanced quickly in early trading after the secretary general of the Organization of Petroleum Exporting Countries (OPEC), Ali Rodriguez, said that general consensus had been reached on the need for a production cut if oil prices remained below 22 dollars a barrel over the next 10 working days.
The organization would then cut output by 500,000 barrels a day and producers outside OPEC such as Angola, Kazakhstan, Mexico, Oman, and Russia would cooperate to reduce supply, he said in Caracas after the close of London trade.
Analysts have become increasingly convinced recently that OPEC would tighten its taps when it meets on January 17 in Vienna, but there had been uncertainty over whether the group would cut production under its stabilization mechanism agreed in March
Under the informal agreement, the organization agreed to increase production by 500,000 barrels a day if its benchmark price stayed above 28 dollars for 20 working days, or cut output by the same amount if the price stayed below 22 dollars for more than 10 working days.
But OPEC said on Friday that its benchmark price had risen to 23.15 dollars, remaining within the 22-28 dollar target band for the third day in a row, cutting the prospect of an immediate output cut.
Prices nevertheless remain substantially lower than the peaks seen last autumn when dwindling stocks caused prices to surge to 10-year highs in excess of 35 dollars a barrel.
The latest snapshot of US crude inventories from the US Energy Department on Thursday showed a 1.8-million-barrel draw last week, contradicting unofficial estimates from the American Petroleum Institute which said on Wednesday that stocks had increased by 64,000 barrels -- LONDON (AFP)
