Oil prices climbed to $59 a barrel on Monday as Opec's decision to hold an emergency meeting in Qatar later this week raised expectations the cartel would finally agree the details of a production cut. US light crude for November delivery rose 40 cents a barrel to $58.97, adding to Friday's 71-cent gain, which had been trimmed by heavy market-on-close selling.
Prices have fallen for 10 of the past 13 weeks, shedding a quarter of their value since a mid-July peak of $78.40 a barrel as consumer inventories swell and supply risks abate.
Opec has struggled to stem the slide amid a disagreement over how to share up a 1 million barrel per day (bpd) output cut that all members appear to agree is needed, but a face-to-face meeting now planned this on Thursday may ease some lingering doubts.
"A definitive statement, with dates, numbers and allocations, about a real cut in output would certainly help," said Tobin Gorey at the Commonwealth Bank of Australia in a report. But even a firm deal may not be enough to completely convince the market: "The meeting itself might not be enough to overcome scepticism that Opec's members will stick to the plan."
Opec's first plan to cut production since April 2004 was first mooted more than a week ago, but ministers have been debating whether to cut from actual output of roughly 27.5 million bpd or from the group's notional 28 million bpd ceiling.
Most member producers have been pumping at if not well beyond their individual Opec quotas. But Indonesia and Venezuela have fallen well below theirs and Iran has had difficulty matching its limit, making them reluctant to cede market share to their peers.
Opec President Edmund Dakar told Reuters at the weekend there was broad agreement the cut should be made from the average actual output level over the past 12 months, which is close to Opec's existing production ceiling of 28 million bpd.
"The time to do something is now because we don't know where the floor of this drop will end. It would be foolish to wait till it gets to $10 before we do anything because that would really kill the capacity initiatives," he said. But he stressed the group would not be setting new quotas: "If we start debating quotas now, we will not be able to respond fast enough.
It would be foolish." Prices also rallied on Friday on an unexpected production loss in Norway, where Station and Royal Dutch Shell have shut down 280,000 barrels of oil equivalent per day output for a week or two to make safety improvements to lifeboats demanded by regulators.
Iran, the world's number four exporter, may move back onto the market's radar screen this week as the European Union's 25 foreign ministers appear set to agree at a meeting on Tuesday to ask the UN Security Council to impose sanctions.