Oil jumps amid Opec hopes

A slump in demand is pushing down prices

The price of oil has jumped as the world's biggest oil exporter suggested that output may be cut by more than expected.

The oil price on world markets has fallen in recent weeks as recession looms.

The oil producers cartel is expected to take action at its meeting in Vienna next week to restore the price - currently at about $20 - to its target range of between $22 and $28.

Saudi oil minister Ali al-Naimi suggested on Thursday that the Organisation of Petroleum Exporting Countries (Opec) could easily cut output by 1.5 million barrels, 50% more than previously expected.

A million or not

Earlier in the week, the cartel's secretary general Ali Rodriguez said that output of crude oil could be cut by one million barrels a day.

Mr Rodriguez said a cut of one million barrels is "a possibility", though he stressed that "any firm decision will be decided on 14 November."

"Opec is facing several problems: the economic downturn, oversupply and high stocks, not only for oil but also products, which has had a negative impact on price," said Mr Rodriguez.

However, the Saudi minister said on Thursday "One million barrels per day is not enough. The number one ( million) is a joke."

If at first you don't succeed...

If Opec cuts output at its November meeting it will be the fourth cut this year in a bid to stem the slide in oil prices, which are down about 30% since mid-September.

Global demand for oil is predicted to shrink sharply this winter, according to the International Energy Agency.

But a cut in output could be politically sensitive as the world's major economies are struggling to stave off recession.

December Brent crude was trading in London at about $19.98 in late trade, having jumped about 65 cents on talk of a larger-than-expected cut.