LONDON, Oct 5: World crude prices leapt to within striking distance of $61 on Thursday after Opec president Edmund Daukoru said the oil cartel might hold an emergency meeting on whether to cut output.

Prices later fell below $60 in New York, but remained up on the day.

New York's main contract, light sweet crude for delivery in November, gained 19 cents to $59.60 per barrel in pit trading, after hitting as high as $60.97.

In London, Brent North Sea crude for November delivery jumped 89 cents to $60.11 in electronic deals after an intra-day peak of $60.97.

Daukoru, president of the Organization of Petroleum Exporting Countries, told AFP: “We are toying with the possibility of having an emergency meeting.” The Opec chief, who is also Nigeria's oil minister, dismissed suggestions that the organisation had already reduced daily output of 28 million barrels by one million.

“We are still consulting on whether we should have an emergency meeting or not,” he said.

“It is at such a meeting that we will come up with an appropriate action.” Meanwhile in Algiers, the Algerian press agency APS quoted an “informed source” who said the meeting would take place on October 18-19 in Vienna.

Crude futures were rising on Thursday “with strong support coming from suggestions that Opec may make larger cutbacks in production,” Sucden analyst Michael Davies said.

The Financial Times had reported earlier in the day that Opec has agreed informally to cut crude output by one million barrels per day, or 4 per cent, to bolster prices that have fallen by about 25 per cent from record

levels in July and August.

A majority of the cartel back a voluntary reduction and the deal could be ratified as early as a mid-Dec meeting in the Nigerian capital of Abuja, the FT said.

Its report came less than a week after Opec members Nigeria and Venezuela voluntarily began reducing their oil production by a combined 170,000 barrels per day.

The Financial Times said Saudi Arabia, the world's top producer and Opec's most important member, was unhappy with the move towards voluntary cuts even though it has quietly cut its output by 200,000 bpd over the past two months.

Societe Generale analyst Deborah White explained that the Saudis were happy to see prices fall further.

“The Saudis have been extremely concerned over the rise of competitive fuels, including biofuels like ethanol,” she said.

“The price run up has brought in a lot of alternative fuels,” reducing demand for crude, White added.

“It's damaging oil prospects in the long term and Saudi Arabia don't want things to get any worse.” Opec's discussion on cutting output also comes amid concerns that once through the northern hemisphere winter, the second quarter of 2007 could see a sizeable oil glut unless production was reduced well in advance, the FT said.

Oil prices soared to record highs in July and August as the market looked at rising US demand and the possibility of UN sanctions being imposed on Iran, a major exporter, over its nuclear programme.—AFP