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Oil jumps on output fears
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January 2, 2001: 7:03 a.m. ET
Saudi Arabia, Kuwait call on OPEC to slash output by 1.5M barrels or more
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LONDON (CNNfn) - Oil prices rose sharply Tuesday after two of OPEC's biggest crude producing countries called for the energy cartel to agree to deep cuts in output later this month.
Saudi Arabia called on the Organization of Petroleum Exporting Countries to slash production by 1.5 million barrels a days when oil ministers meet on Jan. 17 in Vienna, Austria, while Reuters reported a Kuwaiti source as saying Kuwait wants overall production slashed by at least 2 million barrels a day.
Brent Crude for February delivery rose $1.03 to $24.90 on London's International Petroleum Exchange in morning trading.
Four other OPEC countries – Indonesia, the United Arab Emirates, Iran and Libya – have called on the oil cartel to cut at least 1 million barrels a day to prop up falling crude prices.
On Sunday, the six-member Gulf Cooperation Council, which was formed in 1981 as an economic and political alliance that includes four OPEC members, also asked oil ministers to take any steps necessary to achieve the cartel's targeted price of $25 a barrel.
Oil prices have dropped some 30 percent below their mid-October peak and are currently in the lower range of OPEC's $22 to $28 a barrel price band. Oil exporting countries are anxious to head off the threat of further sharp price falls at the end of the first quarter, when peak winter demand ebbs.
Energy revenues are the backbone of the economies in the six Gulf Arab states.
Freezing weather, particularly in energy-thirsty parts of the United States, added to Tuesday's upward momentum in the oil markets. Over the New Year weekend, as much as two feet of snow covered much of the U.S. Northeast, closing some airports and triggering worries about supplies of heating oil stocks.
The Northeast is expected to remain colder than usual until the weekend, forecasters said.
--from staff and wire reports 
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