Iran's oil minister says OPEC should take 2 million barrels a day off the market when it meets Friday.
Gholam Hossein Nozari was speaking a day ahead of the meeting of ministers of the Organization of Petroleum Exporting Countries. The gathering appears set to agree on reducing output in an attempt to stem steep falls in oil prices, but still needs to decide on the size of the cut.
Just as Americans are finally beginning to reap the benefits of plunging gasoline prices — including more money in their pockets — the 13-nation gobal oil cartel is getting ready to squeeze them once again by cutting production and driving up prices to refineries.
Iran is a traditional OPEC hardliner on prices and production and is the second largest producer within the organization. In contrast, Saudi Arabia which leads OPEC production, is expected to act as the brakes on demands of deep cuts.
"The era of cheap oil is finished," Iran's Oil Minister Gholamhossein Nozari boasted earlier this week.
When asked what price Iran would want for its oil, Nozari declared, "The more the better."
Iran's oil minister told Reuters he would push to cut production by up to 2.5 million barrels per day.
Iran has taken a liking to astronomical oil prices, using its newfound wealth to fuel its nuclear program in defiance of the U.S. and the global community.
Meanwhile, oil prices rebounded from a 16-month low to above $67 on Thursday on expectations that OPEC will move to shore up plummeting prices with an output quota cut on Friday.
Light, sweet crude for December delivery rose 87 cents to $67.62 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe.
On Wednesday, the contract fell $5.43 to settle at $66.75 a barrel, the lowest close for a front-month contract since June 13, 2007.
The price dip in oil — and gasoline — finally is working its way into the beleagured American economy, putting a few extra dollars in the hands of consumers just as the home heating and holiday shopping seasons begin.
Sam Gault, president of Gault Inc., a fifth-generation, family-owned oil business in Westport, Conn., said the drop in oil prices is helping his customers, his business and his community.
"Its really going to come down to whether Saudi Arabia wants to cut production, because they're the ones that can afford to cut production," Gault said. "A lot of times the different members of OPEC wind up cheating on their quotas."
Investors are eyeing an emergency meeting Friday in Vienna of the Organization of Petroleum Exporting Countries, where members have said that they would like prices to fluctuate between $70 and $90 a barrel.
"$70 seems to be OPEC's floor price so when it breaks through there, it's probably a good time to buy for some investors," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney.
Chakib Khelil, Algeria's oil minister and OPEC's current president, said he expected a "significant" production cut since global supply outpaces demand by about 2 million barrels a day.
Iran on Thursday called on OPEC to slash oil production by that amount — a daily 2 million barrels — to stop a steep slide in prices that has left crude at its cheapest since last summer.
"If they only cut 1 million barrels, the market probably won't react much to it," Rigby said. "Anything around 1.5 million to 2 million and you'll likely see a short-term bounce in price."
Analysts at JBC Energy in Vienna, Austria, said that the oil cartel is likely to request non-OPEC producers, including Russia, to cooperate with them "in order to hinder the price slide."
"Behind the scenes negotiations (with Russia) are going on and a well-publicized joint cut is still possible," the analysts wrote in a report Thursday.
However, analysts at London-based Sucden said although they expect OPEC to cut production, "given the gloomy economic outlook would economies face, OPEC may choose not to cut output by too much as they risk prolonging the global economic slowdown, which would be negative for them in the long run."
Investors have been preoccupied this week by signs that turmoil in global financial markets may be triggering a severe economic slowdown that will undermine crude demand.
The Energy Information Administration said Wednesday crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy information provider Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.
Over the last four weeks, the EIA said, motor gasoline demand was down 4.3 percent from the same period last year. Distillate fuel demand was down 5.8 percent, and jet fuel demand was down 9.2 percent.
"It's the demand numbers that are the most worrisome to the market," Rigby said. "People are just bearish, thinking we're all heading for a global recession."
In other Nymex trading, heating oil futures rose 1.69 cents to $2.05 a gallon, while gasoline prices gained 1.21 cents to $1.58 a gallon. Natural gas for November delivery fell 6.1 cents to $6.72 per 1,000 cubic feet.
In London, November Brent crude was up 88 cents to $65.40 a barrel on the ICE Futures exchange.
FOXNews.com's Jennifer Lawinski and the Associated Press contributed to this report.