World oil prices rose for a second consecutive day today on growing signs that the OPEC cartel is moving towards a cut in production.
European benchmark Brent Blend crude oil jumped 38 cents to $22.26 a barrel at 1050 GMT, while US crude futures climbed 20 cents to $22.68.
A Gulf source told reporters yesterday that momentum was building within OPEC for a supply cut of 700,000 to one million barrels per day (bpd) but added timing of any new cuts was still under debate.
There are some who want to cut now and others who want to wait until the US retaliation against Afghanistan is over, the source said.
The comments revived a market which has slumped by a quarter in the month since the suicide air attacks on New York and Washington. Evidence of slower global energy demand growth has outweighed fears over security of supply as the US began retaliatory strikes on Afghanistan.
The bombing has so far have posed no threat to crude supplies from the neighbouring Middle East region, which exports about a quarter of the world's oil needs.
Overnight the US has declared control of the skies of Afghanistan but this has little to do with the oil prices, said Lawrence Eagles of GNI Research in a market report.
Indonesia, OPEC's only Asian member, said it would have no problem with another OPEC cut - the fourth this year -- although it had not heard of any such plan.
Dampening the momentum for a cut, Iranian state news agency IRNA reported that an informed source in the country's oil ministry said OPEC had no plans to reduce exports, despite the price fall.
OPEC has decided against another output cut for the time being for fear of adding fuel to market volatility while the next target for US retaliatory strikes remains unclear.
The 11-member cartel agreed in late September to hold output limits at 23.2 million bpd for the time being, but said it would review market conditions and production policy again at a ministerial meeting on November 14th.