Oil price 'will hit $60 by the end of the year'

18 March 2009

Opec's decision to increase compliance with its existing production cuts could see oil prices hit more than $60 a barrel by the end of this year, it has been claimed.

The cartel has moved to reduce output by more than four million barrels a day since September in a bid to offset falling global demand brought about by the economic crisis.

With prices still hovering around $40 (£29) to $50 a barrel, the group last week decided against implementing further cuts, instead opting to concentrate on increasing adherence with existing targets.

Algerian oil minister Chakib Khelil told reporters on Tuesday that this could see compliance rise to around 95 per cent by May, prompting prices to rise in the coming months.

He added that the G20 summit in April is likely to see a number of new measures introduced to help stimulate the world economy, which will also help boost the price of oil to around $60 a barrel by the end of 2009.

Home heating oil customers might therefore look to take advantage of the current low costs by purchasing supplies of the fuel now.

US crude oil rose to its highest settlement point in more than three months on Tuesday, closing at $49.16 a barrel, while London Brent climbed $1.78 to settle at $48.24.

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