Iran Urges OPEC Cut; Oil Prices Rise

Crude oil climbed close to $60 a barrel Wednesday in New York after Iran’s deputy oil minister said the Organization of the Petroleum Exporting Countries should cut output next month to “keep prices stable.”

OPEC will decide at a Jan. 31 meeting in Vienna whether to keep oil production near a 25-year high. The 11-member group agreed to keep its output quotas unchanged at 28 million barrels a day at a meeting this month. OPEC produces nearly 40% of the world’s oil.

Crude oil for February delivery rose $1.66, or 2.9%, to $59.82 a barrel on the New York Mercantile Exchange. Prices are 43% higher than a year ago.

Iranian Deputy Oil Minister Seyed Mohammed Hadi Nejad Hosseinian said Wednesday that after winter demand for oil eased, OPEC should reduce output “to ensure stability in prices.” Iran expects prices to stay between $50 and $60 a barrel next year, he said.

Prices may also have risen Wednesday because speculators who sold contracts in a bet that prices would fall bought them back, said Dan O’Brien, chief market strategist at LaSalle Futures Group in Chicago.

New York oil futures will average $60 a barrel in the first quarter of 2006 and average $58 the whole year, according to the median forecast of 25 analysts surveyed by Bloomberg.

Gasoline for January delivery jumped 7.77 cents, or 5.1%, to $1.591 a gallon. Prices are up 52% from a year earlier.

Heating oil for January delivery advanced 4.55 cents, or 2.8%, to $1.683 a gallon. Futures have gained 38% in the last year.