NEW YORK (AFP) — Oil prices rebounded Friday above 71 dollars a barrel on speculation the OPEC crude producers' cartel could cut production at an emergency meeting next week, traders said.
Crude futures had tumbled on Thursday and have plunged by more than six percent over the week as fears of a global recession raised expectations of a prolonged slowdown to energy demand.
New York's main contract, light sweet crude for delivery in November, rose by 2.00 dollars to close at 71.85 dollars a barrel.
The contract had fallen by 4.69 dollars to 69.85 on Thursday, the first time the benchmark contract closed below the 70-dollar level since August 2007.
London's Brent North Sea crude for delivery in December rose 3.28 dollars to settle at 69.60 dollars a barrel. The November contract expired on Thursday after diving to a 17-month low at 65.45.
OPEC said on Thursday that it would hold an extraordinary meeting earlier than expected next Friday -- instead of in November -- to discuss the global financial crisis and its impact on the oil market.
"The threat of an OPEC cut at its meeting next week has lifted oil," said BetOnMarkets.com analyst David Evans in London on Friday.
"Oil ... has been in a tailspin as worries of a full-fledged recession intensifies. We believe that oil prices have hit their lowest and could only go higher from here," added the analyst.
The 12-nation Organization of Petroleum Exporting Countries, which pumps about 40 percent of global crude supplies, has not indicated whether production levels would be altered at its meeting.
Prices have more than halved in value since striking record high points above 147 dollars per barrel in July -- which has slashed the cartel's revenues.
"Moves to the downside in recent days appear overdone, leading the market to pause for breath ... as contracts undergo what is likely to be a temporary rally," analysts at John Hall Associates said in a note to clients.
"OPEC has now brought forward its extraordinary meeting to next Friday and the consensus is a cut is looming," they added.
The cartel's special ministerial meeting on the impact of the financial crisis on oil prices will be held on October 24 instead of November 18.
Qatar's energy minister predicted Friday that OPEC will cut oil output by at least one million barrels a day at its emergency meeting next week after crude prices tumbled below 70 dollars.
Iran and Libya have also called for lower oil output to shore up prices. OPEC's current output quota is 28.8 million barrels per day.
British Prime Minister Gordon Brown said Friday it was "absolutely scandalous" that oil producing countries were considering cutting production.
On Wednesday, OPEC cut its estimate for growth in demand for oil this year and in 2009 largely because of an "excessive" easing of demand in the United States.
For 2008, the cartel also slashed its estimate for growth in demand to 550,000 barrels per day, giving average total demand of about 86.5 million bpd.
Mike Fitzpatrick at MF Global said some easing of economic fears may temporarily boost oil prices but that "risk aversion and demand contraction should limits these moves."
"Once the market establishes an equilibrium level it will probably remain there for some time," Fitzpatrick added. "As we have been saying, because the market is running on emotion, where that level is will be a subjective determination and impossible to pinpoint."
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