March 9 (Bloomberg) -- Crude oil was little changed after rising to the highest in more than five weeks in New York on speculation the Organization of Petroleum Exporting Countries will decide to reduce output.

Expectations that OPEC will cut supplies further are leading traders to increase bets on crude reaching $50 a barrel. The “dramatic drop” in oil prices has been greater than warranted by the decline in global demand, Venezuelan Finance Minister Ali Rodriguez said yesterday. OPEC meets in Vienna on March 15.

“The market has seen OPEC is determined,” Johannes Benigni, chief executive officer of JBC Energy, said in a television interview from Vienna. “The market is not really driven by demand-driven factors. It’s dominated by supply cuts. By June, we’re going to go above $60.”

Crude oil for April delivery rose as much as $1.51, or 3.3 percent, to $47.03 a barrel, the highest intraday price since Jan. 27. It was at $45.94 at 11:50 a.m. in London in after-hours electronic trading on the New York Mercantile Exchange.

The contract jumped 4.4 percent to $45.52 a barrel on March 6 after a worse-than-expected U.S. jobless report weakened the dollar and increased the investment appeal of commodities.

“It’s got potential to be through $50,” said Peter McGuire, managing director at Commodity Warrants Australia Ltd. in a Bloomberg Television interview from Singapore. “When you look at the seasonality, it starts to rise this time of year. It starts in April, May, through the driving season and into hurricane season.”

OPEC Cuts

OPEC should cut production to reduce the surplus in world markets, Iraqi Oil Minister Hussain al-Shahristani told journalists on March 7, the Wall Street Journal reported.

With a compliance rate of 80 percent with previously announced curbs, the group must still remove 800,000 barrels a day, Secretary General Abdalla el-Badri said in Qatar today.

OPEC, which pumps about 40 percent of the world’s oil, has cut production three times since September to slow the slump in prices and prevent a glut on world markets. The group agreed in December on constraints that would cut supplies in January by 2.2 million barrels a day.

Brent crude oil for April settlement traded at $43.74 a barrel, down $1.11 on London’s ICE Futures Europe exchange as of 11:50 a.m. local time.

West Texas Intermediate front-month oil futures on the New York Mercantile Exchange traded at a premium of $1.84 to the comparable Brent contract on the London-based ICE Futures Europe exchange today. The switch started on March 6.

WTI traded at a record discount of $10.67 to Brent in February and was last at a premium on Dec. 11.

Oversupply in Cushing

The discount disappeared after the U.S. Department of Energy reported that stockpiles in Cushing, Oklahoma, the delivery point for WTI futures, declined for a third straight week. An oversupply of crude at Cushing had previously pushed WTI prices to record lows relative to Brent, raising concerns that the contract was being distorted as a price benchmark.

The April WTI contract is trading at a discount of $6.06 a barrel to the December future, a situation known as a contango, because of the excess supplies at Cushing. Declines in the Oklahoma inventories over the past three weeks’ reports have narrowed that gap from $8.38 a barrel a week ago.

“The Nymex forward curve in crude oil flattened last week to a near year-to-date low,” Stephen Schork of the Schork Group Inc. said in a report today. “Per last week’s Energy Department report, crude oil supplies were well into the 90th percentile, but concerns in the futures regarding future supply are mounting.”

To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net. Grant Smith in London at gsmith52@bloomberg.net

Last Updated: March 9, 2009 07:51 EDT