Oil prices bounced back almost $2 to above $39 a barrel this afternoon after Saudi Arabia said it had removed 1.7 million barrels per day (bpd) of oil from the world market since last summer.
US crude rose to a high of $39.50, up $1.91, before easing back slightly. Later, the contract was at $38.44. February Brent jumped to a high of $45.59, up $2.68.
The moves followed comments by Saudi Arabian Oil Minister Ali al-Naimi that the kingdom would pump below its OPEC production target of 8.05 million bpd in February. 'If there is a need to do more, we will do so because our purpose is to bring things in balance,' he told reporters in New Delhi.
Dealers said the market was also supported by a blast of cold winter weather in the northern hemisphere.
The Saudi comments helped turn around a market that had been falling ahead of what many analysts expect will be data on Wednesday showing further increases in US oil stockpiles.
