Oil rose toward $62 a barrel on Tuesday as producer group OPEC kindled fears of production cuts, saying oil's steep slide from record peaks had brought prices too low, according to Reuters. U.S. crude rose 41 cents at $61.86 a barrel by 11:45 a.m. (1545 GMT), bringing the price well above Monday's six-month low below $60. London Brent rose 16 cents to $60.96. Oil prices have had their steepest decline since the Gulf War in 1991, falling from July's peak of $78.40 a barrel. The rebound Tuesday came after OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done." He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall. OPEC expects the global oil supply to be a "colossal" 1.8 million barrels per day above demand by the second quarter of next year, he added. "The general sentiment is that if prices fall further, OPEC might decide to come in and cut its quota," said Andrew Harrington, an industry analyst at ANZ. "Given the language that some OPEC members are using, the market is interpreting that a price below $60 would be a trigger point for the group to act," he added. OPEC sources have said the group has no plans to call an emergency meeting ahead of its scheduled Dec. 14 meeting in Nigeria. OPEC has avoided setting a target oil price to defend. Saudi Oil Minister Ali al-Naimi, who steers the policy of the world's biggest exporter, said last week that prices were "reasonable." Saudi Arabia's Monetary Authority Vice Governor Muhammad Al-Jasser added on Tuesday that oil prices at $60 remained "very healthy." But Iran's Oil Minister Kazem Vaziri-Hameneh has said he does not want to see the price for OPEC's basket of crude grades drop below $60, which equates to U.S. crude at roughly $65. U.S. crude has tumbled around 20 percent since its $78.40-peak in mid-July, taking back virtually all of this year's gains, on easing Middle East tensions, ample fuel stocks and slowing U.S. economic growth. A preliminary Reuters poll ahead of Wednesday's data found that U.S. stocks of distillates, which include heating fuel, likely rose 2.2 million barrels last week. Inventories already stand at their highest level since January 1999. Crude oil supplies likely slipped 1.7 million barrels last week, while gasoline stocks edged 500,000 barrels higher, the survey said.
