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Oil prices rally after producer reactions

12 December 2008 08:27 (UTC +04:00)

Baku. Vahab Rzayev - APA-Economics. Crude oil jumped 10 percent, the biggest gain in five weeks, after the Saudi Arabian oil minister said he had delivered the output cuts promised to OPEC, a sign that world supplies are smaller than traders had estimated, Bloomberg reported.
Crude oil for January delivery rose $4.46 to $47.98 a barrel at 2:44 p.m. on the New York Mercantile Exchange, the highest settlement since Dec. 1.
Brent crude oil for January settlement increased $4.99, or 12 percent, to settle at $47.39 a barrel on Londonâ€™s ICE Futures Europe exchange, the biggest one-day gain since March 1998.
Russian President Dmitry Medvedev said his country, the second-biggest oil producer, may join OPEC and reduce output to support prices, RIA Novosti reported from Kurgan, Russia.
Oil also advanced because the dollar dropped to a seven-week low against the euro. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The dollar weakened 2.3 percent to $1.3316 per euro from $1.3023 yesterday.