Brent touches $80 on possible OPEC output cuts, strong U.S. data

Libya, Ecuador and Venezuela earlier called for OPEC to cut production

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Brent briefly rose to $80 a barrel on Friday on speculation OPEC could agree to output cuts at its meeting next week, with strong U.S. economic data also bolstering oil prices.

Venezuela reiterated its call for production cuts, with Foreign Minister Rafael Ramirez saying it was willing to curb its own output if the Organization of the Petroleum Exporting Countries agreed to reduce production at its Nov. 27 gathering.

Libya, Ecuador and Venezuela earlier called for OPEC to cut production. Iran urged fellow OPEC members to shore up oil prices while saying a reduction in output was unlikely.

“There are mixed messages from OPEC – it’s going to be a very interesting meeting. Will Saudi Arabia still be the kingpin or will it create a bit of dissent between those members who want to maintain production and others who want to cut output?” said Jonathan Barratt, chief investment officer of Sydney’s Ayers Alliance.

Speculation on what OPEC might do pushed Brent to $80 a barrel in early Asian trade on Friday and U.S. crude futures rose nearly $1.

“I think it will be very difficult for OPEC to agree a cut and announce a headline number,” said Victor Shum, managing director of downstream energy consulting with IHS.

Brent was up 25 cents at $79.58 a barrel as of 0622 GMT on Friday after jumping $1.23 in the previous session. The benchmark could snap an eight-week slide if the gains are sustained on Friday.

U.S. crude for January delivery rose 45 cents to $76.31 a barrel after gaining $1 in the previous session.

“I’m looking for a bit of a rally today,” Barratt said, forecasting U.S. crude could climb to $78 a barrel with Brent up to $80.50.

Oil prices were supported by a raft of U.S. economic data that came out overnight in the Asian time zone.

That included a business activity index that surged to its highest level in 21 years, while home re-sales rose to an annual rate of 5.26 million units, the highest since September 2013.

Investors are also keeping an eye on Iran. Sharp divisions remain between Tehran and world powers on an agreement over Iran’s nuclear program, which could see the deadline for a pact extended to March from Nov. 24, officials said on Thursday.

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