NEW YORK, Dec 22: US oil prices were higher on Friday as Opec was expected to cut supplies by Jan 1 to combat slumping demand and a slowing global economy.

February crude futures on the New York Mercantile Exchange settled Friday’s session 34 cents higher at $19.62 a barrel.

The Organization of the Petroleum Exporting Countries (Opec), responsible for two-thirds of world oil exports, is scheduled to have an emergency meeting in Cairo Dec. 28 to set production policy, hopeful of having with cut pledges from non-Opec exporting nations in hand.

Opec’s planned 1.5 million barrels per day (bpd) production cut with a target of another 500,000 bpd in cuts from non-OPEC nations.

Russia, Mexico, Norway, Oman and Angola have together agreed to reduce exports by 462,500 bpd.

This would take nearly 2 million barrels out of the world’s daily supply of 76 million barrels.

If there is little difference, we think this should not be an obstacle to achieving the larger goal of the cut, Venezuelan Energy and Mines Minister Alvaro Silva said on Thursday.

Opec has already cut supply three times this year and was not willing to lose more market share to non-Opec exporters, especially Russia.

Opec President Chakib Khelil on Friday welcomed the pledged output cuts. Opec Secretary-General Ali Rodriguez on Friday said that Opec is worried about uncertainty of the worldwide economy.

It is because of this uncertainty that we must act now, Rodriguez said.

Oil prices are down 30 per cent after the Sept. 11, attacks on the United States, which deepened an ongoing economic slowdown.

The worldwide economic climate is as bad as it’s been since the 1980-1982 recession, Mike Rothman, senior markets specialist at Merrill Lynch, said.

Friday’s price move was caused more by trading logistics than fresh news regarding Opec or the economy, Rothman said.

Prices have gotten support from cool weather finally arriving in the US Northeast, the world’s biggest heating oil market.

Near- to below-normal temperatures forecast for the Northeast through the Christmas period should further lift heating oil consumption.

Total US fuel stocks are over 50 million barrels, or eight per cent, above this time last year. This serves as a protection against a repeat of recent winter price spikes.

US consumers and the US economy should benefit from the oil price slump, as the cost of US gasoline fell 3.6 cents over the last week to $1.06 a gallon, the cheapest level since March 1999, the US Energy Department this week said.

The pump price of regular unleaded gasoline is down 36 cents from a year ago.

Since the Sept. 11 attacks, gasoline prices have fallen by one-third.

The government also reported the price for diesel fuel fell to $1.143 a gallon, down 40 cents from a year ago and the lowest level since August 1999.

—Reuters