Oil Price Increases in New York, Remains Near Six-Month Low

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Sept. 13 (Bloomberg) -- Oil prices rose in New York, reversing seven days of losses, amid signs that OPEC will try to keep prices above $60 a barrel.

``We have to think about OPEC's next action,'' said Kenichiro Yamaguchi, chief operating officer for Petro Diamond Risk Management Ltd. in London, a unit of Mitsubishi Corp., Japan's largest trading company. ``That's a fear.''

Crude oil for October delivery rose 27 cents to $64.03 in electronic trading on the New York Mercantile Exchange at 11:16 a.m. in London. The gains come after oil prices have dropped 18 percent since touching a record $78.40 on July 14.

Airlines and other large oil consumers are buying to take advantage of recent declines, said Jon House, a crude oil trader with Macquarie Bank Ltd. in London. Yamaguchi said some of the gains may be the result of traders trying to cover short positions, or bets that oil prices will continue to fall.

Brent crude for October settlement rose 32 cents to $63.31 a barrel on London's ICE Futures Exchange. The contract expires Sept. 14.

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, is concerned by the pace of the decline in prices, oil ministers from Nigeria, Iran and Algeria said this week. OPEC agreed Sept. 11 to keep its output target unchanged at 28 million barrels a day.

OPEC Off `Autopilot'

``My position is due to the speed at which prices may be falling,'' Chakib Khelil, Algeria's oil minister, said yesterday. ``We are not in an autopilot framework anymore; we are engaged with supply and demand again.''

Kazem Vaziri-Hamaneh, Iran's oil minister, yesterday said oil prices below $60 could prompt moves to curtail production. ``Any price below $60 would not be very favorable for us,'' Vaziri- Hamaneh said in an interview in Vienna.

That price is ``much too high,'' said Claude Mandil, executive director of the International Energy Agency, a Paris- based adviser to energy importing nations.

``It's words,'' said Mandil, who is attending an OPEC seminar in Vienna. ``At $60 a barrel, I don't think it will be very easy to find people willing to cut production.''

Worldwide oil demand will be 84.7 million barrels a day this year, the IEA wrote yesterday in a monthly report, 100,000 barrels a day less than estimated last month. The forecast for demand next year was cut by 160,000 barrels a day to 86.2 million.

Nigeria Strike

Nigeria, Africa's biggest oil producer, may have production slowed during a three-day ``warning'' strike over better security for workers.

More than 20,000 workers from the Petroleum & Natural Gas Senior Staff Association, or Pengassan, and the National Union of Petroleum & Natural Gas Workers, or Nupeng, are striking, Lumumba Okugbawa, Pengassan's acting general secretary, said in a telephone interview.

Militant attacks and other damage have cut Nigeria's oil production by 872,000 barrels a day, Oil Minister Edmund Daukoru said on Sept. 11.

Nigerian output was estimated at 2.27 million barrels a day in August, slightly more than the 2.26 million barrels a day in July, according to the IEA. The West African country's daily output averaged 2.4 million barrels during 2005.

U.S. inventory reports later today are expected to show that fuel supplies rose.

Gasoline supplies probably advanced by 200,000 barrels last week, according to an analyst survey. They held 206.9 million barrels the week before, 4.2 percent more than the five-year average, according to government figures. Distillate fuel inventories, including diesel and heating oil, likely rose last week by 2 million barrels, said the survey.