LONDON, Nov 24: Oil prices roared higher towards $55 on Monday as equity markets surged on government action aimed at tackling a severe economic downturn.

Light sweet crude for delivery in January soared $4.29 to $54.22 a barrel on the New York Mercantile Exchange (NYMEX).

On London’s InterContinental Exchange (ICE), Brent North Sea crude for January rallied $4.31 to $53.50.

Oil prices also benefited from “the increasing prospect of an Opec supply cut,” said Nimit Khamar, an energy market analyst for Sucden brokers in London.

Iran, the second biggest producer in the Organisation of Petroleum Exporting Countries (OPEC), said on Monday that output needed cutting as weak energy demand weighs heavily on prices.

“Opec decided to cut production by 1.5 million barrels (a day from November 1) but it could not stop oil prices from falling,” Iranian Opec envoy Mohammad Ali Khatbi was quoted a saying by the Resalat daily.

“So it appears that Opec needs to further reduce production to prevent this trend,” Khatibi said.

Opec, which pumps 40 percent of world crude, is to hold an extraordinary meeting on Saturday in Egypt amid speculation that member nations will agree to cut output again in a bid to boost plunging oil prices.

In Cairo, Opec member Venezuela will seek a cut in production of 1.0 million barrels per day by the end of the year, Venezuelan Energy Minister Rafael Ramirez said on Sunday.

“Venezuela will propose a new cut in production at the next meeting of the Organisation of Petroleum Exporting Countries,” Ramirez said in a statement.

The reduction “should be effective before year’s end,” he added.—AFP