BBC

Tuesday, 2 January, 2001, 14:36 GMT Oil prices surge into new year

Gulf leaders have urged a cut in oil production Crude prices surged into 2001, as the world's biggest oil exporter demanded action to support prices, and the US cold snap dumped one foot of snow on New York.

In London, the price of Brent crude soared more than $1 a barrel after Saudi Arabia urged the producers' organisation Opec to back an output cut of 1.5 million barrels a day.

The call follows a meeting of Gulf states over the weekend which backed action to underpin oil prices.

In lunchtime trading, Brent crude stood $0.91 higher at $24.78.

Snowfall

The oil price was also supported by cold weather in the US, which traders said would boost demand for crude.

Temperatures in north eastern states, which received their first snow of the winter over the weekend, will fall five to 10 degrees below normal on Tuesday, official weather forecasters said.

Central states, recovering from storms on Christmas Day, were hit by snow on Monday.

In earlier trade in Asia, the oil as measured in benchmark New York Mercantile Exchange (Nymex) futures rose $0.39 to $27.19 a barrel.

Nymex oil prices in 2000 averaged $30.20 a barrel, the highest level since 1983, and well above the 1999 average of $19.25.

-- Rachel Gibson (rgibson@hotmail.com), January 02, 2001