Oil Prices Rally on OPEC Output Cut Speculation

Crude prices jumped to settle above 47 U.S. dollars a barrel on Monday as investors speculate that the OPEC would further cut production.

Light, sweet crude for April delivery rose 1.55 dollars to settle at 47.07 dollars a barrel on the New York Mercantile Exchange. Futures topped 48.83 dollars a barrel earlier, the highest intra-day price since Jan. 7.

The market speculated that OPEC would decide to reduce output when the cartel meets in Vienna on March 15. Iraqi official said on Monday that current crude oil prices are not "profitable and fair" for oil producing countries and should be increased. The view was echoed by OPEC members like Venezuela and Iran.

Abdullah al-Badri, OPEC's secretary general, said on Friday that current oil prices were creating the risk of a future supply shortfall due to low investment in the industry.

Oil prices jumped despite that the dollar rebounded against other major currencies.

In London, Brent crude for April delivery fell 72 cents to settle at 44.13 dollars on the ICE Futures exchange.