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Last Updated: Monday, 15 January 2007, 08:45 GMT
Oil rises on talk of an Opec cut
Oil traders in New York
Some Opec members say oil should not fall under $60 a barrel
Oil prices moved above $53 a barrel on Monday, after talk that oil producing cartel Opec could cut output soon.

The rise came after weekend reports that Algerian energy minister Chakib Khelil said Opec might hold an emergency meeting on falling prices.

Venezuela and Iran are two key Opec members that are in favour of a cut.

In morning Asian trade light sweet crude for February delivery rose 36 cents to $53.35. And Brent crude for February was up 14 cents to $53.09.

'Reaction expected'

The rise comes as oil has been falling in recent weeks - last week hitting a 19-month-low.

"Prices sank to quite low levels last week so the market is expecting some sort of reaction from Opec," said Tobin Gorey, an analyst at Commonwealth Bank.

Since the start of this year oil prices have fallen by some 13%.

New York crude oil since January 2005
The change in oil prices has been far from steady

Mr Gorey added "It is possible that (Opec) will announce more cuts, I wouldn't rule that out, but what the market is going to be impressed by is compliance with the cuts."

The group agreed to cut output by 1.2 million-barrels from 1 November last year, and a further 500,000 barrels from 1 February, to prevent prices sliding.

Some Opec ministers say prices should not be allowed to fall below $60.

The reason behind the fall has largely been warm weather, which has undermined demand - particularly in the US - for distillates, which include heating oil.

It is expected that continued warm weather will continue to eat into demand.

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