Oil hits $55 ahead of Opec talks

Oil rose in late trade on short-covering ahead of Opec's meeting this weekend after slowing demand sent prices down nearly 20% in November.

US crude traded up 76 cents to $55.20 a barrel at 2:32 p.m. EST (1932 GMT) in late post-settlement trade. Earlier, US crude settled at $54.43 a barrel, down 1 cent from Wednesday's close, in a shortened Nymex trading session. US markets, including the New York Mercantile Exchange, were shut on Thursday for the Thanksgiving holiday, though US crude did trade on the Globex electronic platform. London Brent crude settled at $53.49, up 36 cents from Thursday. "It looked like there was some short-covering ahead of the Opec meeting," Jim Ritterbusch, president, Ritterbusch & Associates, in Galena, Illinois, told Reuters. "There was some support from the recovery in the stock market." US stocks rebounded from early losses as financials gained on signs that liquidity measures were beginning to work. Oil prices have tumbled from record highs over $147 a barrel struck in July as demand in the US and other large consumer nations slumped amid an economic crisis. Global oil demand is expected to decline slightly this year and next, the first fall in a generation because of the world economic downturn, according to a Reuters poll. Crude's steep November drop followed a 32% fall in October, the biggest monthly drop ever. The losses came despite agreements by Opec since September to cut output by a total of 2 million barrels per day. Opec ministers gathering in Cairo for an informal meeting this weekend said they were likely to defer a decision on more output cuts until the 17 December meeting in Algeria. A Reuters poll this week of 15 analysts forecast by a narrow margin that Opec would make no announcement of a further reduction in oil output this weekend but would probably do so at its meeting in Algeria.
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