Updated from 10:43a.m. EDT
Crude oil futures climbed back above $60 Thursday as speculation mounted that the Organization of the Petroleum Exporting Countries had informally agreed to its first production cut in more than two years.
Light, sweet crude, the benchmark contract, rose 62 cents to close at $60.03 a barrel on Nymex. Prices jumped this morning after reports emerged of the cut, but pulled back in the afternoon amid conflicting information.
"We agree that something needs to be done," OPEC President Edmund Daukoru told
. "We will have to agree on how much, how soon and how we distribute it among the member countries."
Wholesale unleaded gasoline and heating oil each picked up 1 cent to $1.51 a gallon and $1.61 a gallon, respectively. Natural gas increased 30 cents to $6.29 per million British thermal units.
OPEC will supposedly reduce output by 3%, or 1 million barrels a day, but a start date has not been given. Most of the reductions will come from the Saudi Arabia, the group's largest producer, which plans to reduce output by 300,000 barrels a day from 9.1 million barrels.
The group might hold an emergency meeting Oct. 18-19 to discuss further cuts, the
Algerian Press Service
reported. The cartel was otherwise scheduled to meet Dec. 14. As recently as last month, the group of 11 oil producing countries opted to keep production the same.
Over the past few weeks, speculation has been building as to whether OPEC would trim output to boost sagging crude prices. Oil has sunk 25% since touching a high in July, prompting members to reevaluate their record pumping levels of 28 million barrels a day.
High inventories have also prompted OPEC to take another look at their production. Compared to last year, supplies of distillates, which include heating oil, are 18% higher. Gasoline stockpiles are up 10% and crude inventories are nearly 7% larger.
With the focus on OPEC and brimming supplies, traders have shrugged off the impasse with Iran over its nuclear program. Iranian President Mahmoud Ahmadinejad threatened "humiliation" Thursday if the U.N. Security Council imposes trade sanctions on Tehran,
reported. The group meets next week to start discussing punitive measures against Iran for ignoring U.N. demands to halt uranium enrichment.
In February, Iran restarted its nuclear program after a two-year hiatus, ostensibly to produce more power for its growing population. European and U.S. diplomats put together trade incentives to persuade Iran to drop its program, but Tehran has ignored the package and missed an Aug. 31 deadline to respond to them.
Meanwhile, among energy stocks,
was picking up 1.9% after the oil company said it would form a partnership with
to focus on North American heavy crude. The deal will merge two of Conoco's refineries and two of EnCana's heavy oil sands projects.
Drillers and refiners on the Amex Oil index were climbing by 1%, boosted by Conoco,