Oct. 9 (Bloomberg) -- Crude oil rose after OPEC members including Saudi Arabia said they would voluntarily cut production to stem a 23 percent slide in prices during the past two months.

The countries, including Venezuela and Nigeria, which promised to lower output on Oct. 1, offered supply reductions aimed at cutting 1 million barrels a day, OPEC spokesman Levi Ajuonuma said yesterday. The 11-member Organization of Petroleum Exporting Countries pumps about 40 percent of the world's oil.

``OPEC has returned,'' said Thierry LeFrancois, an energy analyst at Natexis Bleichroeder in Paris. ``For the first time in three or four years, OPEC can be judged as a cartel.''

Oil for November delivery advanced as much as 84 cents, or 1.4 percent, to $60.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $60.43 at 2:16 p.m. London time. Prices have dropped about $18 a barrel from a record $78.40 on July 14.

Crude fell to a seven-month low of $57.75 on Oct. 4 as U.S. inventories rose and concern eased about a standoff between the U.S. and Iran, the world's fourth-largest oil producer, over Iran's nuclear research. OPEC usually increases output in the fourth quarter when global demand peaks because of heating-fuel use.

Demand in the fourth quarter will average 85.6 million barrels a day, up 2.2 percent from a year ago, OPEC said in a Sept. 15 forecast.

Brent crude for November settlement gained as much as $1.17, or 2 percent, to $61 on the ICE Futures Exchange. It was at $60.69 at 2:16 p.m. London time.

`A Stronger Reaction'

``There should be a stronger reaction to a 1 million-barrel cut,'' said Stanislav Nazarati, a trader at Estonia-based Letofin AS. ``I don't know how to react to this, as OPEC is such a bureaucratic machine and they already supply less on the market.''

Saudi Arabia, Libya, Algeria, and Kuwait joined Venezuela and Nigeria in saying they would voluntarily cut production. The plan by the six countries represents a 3.4 percent reduction from last month's estimated output by OPEC.

Edmund Daukoru, president of the group and Nigeria's oil minister, urged member states on Oct. 3 to lower production before the group's next scheduled meeting in December. Venezuela and Nigeria pledged to cut output by a total of 170,000 barrels a day.

A spokesman at OPEC's Vienna-based headquarters said today that members are still discussing a formal production cut and whether to hold an emergency meeting this month. OPEC's next scheduled meeting is Dec. 14.

Defending $55

Persian Gulf producers will defend an oil price of $55 a barrel, Mohsin Khan, the International Monetary Fund director for the Middle East and central Asia, said yesterday. The price is an important determinant of annual government budgets in the region. Each dollar off the price of oil shrinks the Middle East's earnings by about $8 billion, he said.

OPEC agreed at a meeting on Sept. 11 to leave its output ceiling unchanged at 28 million barrels a day. The quota doesn't apply to Iraq, which pumped about 2 million barrels a day last month. OPEC may say today whether it plans to hold an emergency meeting to ratify the informal cuts, Ajuonuma said.

The group, excluding Iran, supplied 27.6 million barrels a day in September, down from 27.8 million barrels a day in August, according to Bloomberg News estimates.

``The eleven OPEC members agree to cut production in reaction to the fall in oil prices,'' Algeria's Oil Minister Chakib Khelil said yesterday in Algiers, the state-run Algerie Presse Service reported. ``There is a possibility of holding an emergency meeting on Oct. 18 and 19, but there is no consensus yet.''

The OPEC crude oil basket price rose 6 cents to $55.13 a barrel on Oct. 6, the latest available data. The daily price index is a weighted average of 11 crude blends produced by OPEC states.

Saudi Arabia

OPEC didn't give details of the size of the cut for each country. Saudi Arabia is the world's biggest oil producer and accounted for about 31 percent of the group's output last month.

Effects of OPEC's action ``are possible only in about a month, as tankers are already chartered for oil,'' Nazarati said. ``The market is more focused on fundamentals, such as fuel inventories or refinery utilization.''

Rising stockpiles and falling prices prompted hedge-fund managers and other large speculators to almost eliminate their bets on higher oil prices last week, according to a U.S. Commodity Futures Trading Commission report.

Speculative long positions, or bets prices will rise, fell by 99 percent to 131 contracts in the week ended Oct. 3. That was the smallest long position in New York oil futures since March 24.

U.S. Inventories

Oil stockpiles in the U.S., the world's biggest consumer, held 328.1 million barrels on Sept. 29, or 6.7 percent more than a year earlier, the Energy Department said last week. Supplies of distillates, including diesel and heating oil, held 151.5 million barrels, 18 percent higher than a year ago.

``Inventories around the world, most notably in Europe and North America, are quite high already,'' said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.

China, the world's biggest energy consumer after the U.S., started filling emergency oil storage in a 5.2 million-cubic-meter storage facility in the eastern province of Zhejiang, the Office of the National Energy Leading Group said in a statement on its Web site yesterday, citing local media.

North Korea's announcement today of its first nuclear weapons test failed to push prices higher because the country doesn't export oil, Letofin's Nazarati said. ``Of course it's not positive, but the price should rise above $65 a barrel for the market to prove that it's making a U-turn.''

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: October 9, 2006 09:18 EDT