LONDON – Oil prices rose for the second day in a row on Thursday as several OPEC ministers called for the cartel to stop producing more oil than its official target.
U.S. light crude rose 56 cents to $42.45 a barrel after touching a four-month low at $40.45 on on the New York Mercantile Exchange (search) Wednesday. London's Brent crude (search) rose 84 cents to $39.53 a barrel.
The Organization of the Petroleum Exporting Countries (search) is gathering in Cairo ahead of a policy meeting on Friday that will decide whether or not to cut crude supplies.
Kuwait, Venezuela, Libya and the UAE have urged greater compliance by OPEC with its output target of 27 million barrels per day (bpd) due to concerns that oil supplies are outstripping demand.
Kuwait's oil minister also called for OPEC to consider cutting output by half a million barrels in the second quarter of next year to counter the fall in oil demand when the northern hemisphere winter ends.
"I think we have to cut off all our overproduction," Sheikh Ahmad al-Fahd said. "I think we have also to cut 500,000 barrels per day from the ceiling, maybe not now but we have to decide it for the second quarter."
The group is producing about a million barrels more than its target level after boosting output to cool record oil prices that broke $55 a barrel in October.
Prices have tumbled nearly a quarter in the last six weeks as stockpiles rose and as a mild start to the U.S. winter kept heating oil demand low.
Saudi Arabia's Oil Minister Ali al-Naimi said he was approaching the meeting with an open mind, although on Wednesday he questioned the need for OPEC to take action when the winter had only just started.
OPEC's biggest task is to gauge how aggressively it can act to bolster prices without endangering world economic growth, which is expected to slow next year.
So far oil demand has proved resilient to this year's price surge, but some economists warn the full impact of high energy bills will not show through for another six months and a spell of lower prices would at last help protect global growth.
Prices also were bolstered by forecasts for an Arctic blast of cold air in the United States next week that would lift demand for heating fuels.
A weekly government report showed natural gas inventories in the United States down sharply.
U.S. government data on Wednesday also showed a smaller-than-expected increase in national distillate inventories, which include winter heating oil and diesel.
Heating oil stocks rose 100,000 barrels but remained more than 13 percent below year-earlier levels ahead of peak winter consumption, the EIA said.