Oil prices reached two-month highs today due to a cut in OPEC output and a strike in Venezuela that has crippled supplies from the world's fifth-largest exporter.
The price of crude is up some $4 a barrel, about 15 per cent, since early November because of the Venezuelan stoppage and the threat of a US war against Iraq.
London Brent blend futures traded up 38 cents at $27.25 a barrel and US light crude added 34 cents to $28.35 a barrel after 60-cent gains yesterday.
The Organisation of Petroleum Exporting Countries (OPEC) agreed to cut oil supplies and sought to restore market confidence in its system of quota limits by raising official output targets.
Ministers said the pact, for the first quarter of 2003, meant they were aiming for a production cut of 1.7 million barrels per day (bpd), or 7 per cent.
OPEC admits chronic quota-busting had pushed recent output three million bpd over its old supply target. It raised that target from 21.7 million bpd to 23 million bpd.