The recent slide in oil and gas prices could soon come to an end, as reports indicate that OPEC may be planning an emergency meeting to discuss a cut in crude output.
Oil producing countries have become increasingly anxious with the drop in prices as of late, and the cartel already has plans to curtail output beginning Feb. 1. Still, there are more indications that further production cuts are likely if prices continue to wane, following record highs over the summer.
Crude oil futures plummeted as low as $51.56 Friday, the lowest in 19 months, before closing at $52.99 a barrel, up $1.11 on news that the Organization of Petroleum Exporting Countries was considering an emergency meeting and new production cuts.
OPEC members have not decided on whether to hold an emergency meeting to decide on the slide in crude oil prices, an Iranian Oil Ministry official told Dow Jones Newswires Sunday. Crude oil prices closed 2006 at $61.05 a barrel.
"There has as yet been no official decision on holding an extraordinary OPEC meeting in the coming days," said Javad Yarjani, the head of OPEC affairs at the Iranian Oil Ministry.
The energy market has had a hard time maintaining rebounds lately, despite several factors that have given prices a boost in the past: high tensions in the Middle East, growing global energy demand, escalating violence in Nigeria and the possibility of another OPEC cut.
If OPEC announced another production cut — on top of the 1.2 million barrel-a-day reduction that began in November, and the 500,000 barrel-a-day cut set to begin Feb. 1 — analysts say oil prices would likely rise. Still, OPEC's previous cuts haven't been able to keep crude prices above $60 a barrel for long, largely because many traders doubt that the cuts are fully enforced.
Also weighing on prices recently were persistent mild weather in parts of the United States, Europe and Asia that consume heating oil and a number of investment funds taking short positions, or bets that prices will fall.
Light, sweet crude for February delivery gained 26 cents to $53.25 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore. There will not be floor trading Monday as the Nymex will be closed for Martin Luther King Jr. Day, a public holiday in the United States.
The Associated Press contributed to this report.