Saudi Arabian Oil Minister Hisham Nazer surprised members of OPEC on Saturday by calling for a one-year freeze in member countries' current production ceiling of 24.52 million barrels per day.
At least eight of OPEC's 12 members Monday said they would agree to the freeze, although Libya said it would prefer a six-month rollover, saying 12 months was too long.
Oil prices surged 25 to 30 cents per barrel in Asia as traders welcomed the prospect of any extended OPEC output cap.
North Sea Brent crude oil, the international benchmark, was quoted around $17 in late afternoon, while U.S. crude oil prices gained 33 cents, to $17.88 per barrel.
"It is definitely in reaction" to the Saudi oil minister's statements over the weekend, a broker in New York said by telephone of the price surge.
OPEC has held its output ceiling at the same level since September 1993, but oil prices have continued to deteriorate because of higher non-OPEC oil production.
"The market had expected a six-month rollover and was taken by surprise," one Tokyo trader said Monday.
Nazer said Saudia Arabia wanted OPEC to keep a cap on production throughout 1995 to achieve "better prices."
The price for OPEC's basket of crude averaged $16.97 in the week ended Nov. 11, a far cry from its $21 target and little better in real terms than before the Arab oil embargo of 1973.
"At this time, the most important issue is that the price is not very strong, the price is low," Iranian Oil Minister Gholamreza Aghazadeh said Sunday.
"If you have the Saudis in favor of something, the other Gulf countries usually follow. And the key here is that the Iranians are not going to oppose it," a delegate from a non-Middle East Gulf OPEC state said of the freeze.
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