The price of oil continued its late rally of the previous session in early deals on Thursday as rumours circulated the market that Saudi Arabia was preparing to cut exports to Asia by 500,000 barrels day from February.
A barrel of reference Brent North Sea crude for February delivery climbed to $25.77 here, from $25.34 at the close on Wednesday, when prices climbed sharply towards the final bell.
In New York, the reference light sweet crude February contract jumped $1.84 to $29.48 per barrel overnight.
The Organisation of Petroleum Exporting Countries (OPEC) basket price of global crudes rose to $23.69 on Wednesday from $22.84 on Tuesday, the OPECNA agency reported.
GNI trader Robert Laughlin said the latest wave of buying had been fuelled by rumours that Saudi Arabia was already cutting back deliveries to the Asian market ahead of the OPEC meeting next Wednesday in Vienna.
"They cut back between 10 and 12 percent for their Asian buyers for their February contract," he said. "That will total 500,000 barrels per day."
Although analysts had been expecting that OPEC would agree to tighten its taps by about 1.5 million barrels a day at its meeting next week, they said that the timing of the move -- coming ahead of the ministerial meeting -- had been surprising.
"While we had said this was a done deal at 1.5 million barrels per day, we had at least expected a little wrangling over the timing of the cut at the OPEC meeting," the GNI brokerage said in a research note.
Prices also gained support from a blast of cold weather sweeping across much of Europe, Laughlin said.
"You've also got the colder weather in Europe meaning strength coming in on (the prices of oil-based) products," he said.—AFP.
©--Agence France Presse.
© 2001 Mena Report (www.menareport.com)
