Oil prices held steady today, reversing an early dip after a senior Saudi source said there was a high chance that the OPEC producers' cartel would agree a second output cut this year when it meets in mid-March.
"The possibility of cutting production is very, very high," the Saudi source told reporters on the sidelines of an energy seminar in Tokyo.
US light crude, which was nine cents in the red in electronic dealings in Asia, recovered to $28.64 a barrel, four cents firmer than the day-earlier close in New York.
The market rallied 76 cents yesterday, driven up by a swath of cold weather in the northeast region of the United States and speculation that OPEC would agree fresh output curbs.
Oil ministers from member states of the Organization of the Petroleum Exporting Countries are due to convene in Vienna on March 16th to review production policy.
OPEC trimmed group output by 1.5 million barrels per day (bpd), or just over five per cent, from February 1st to avoid any supply glut when peak winter demand ebbs in the second quarter.
Since then oil markets have been rattled by signs of a global economic slowdown, especially in the world's biggest energy consumer, the United States.
Analysts fear a sluggish US economy will hit petroleum demand there and in other countries dependent on North America for vital export markets.
Several analysts have downgraded projections for oil demand growth this year, including the International Energy Agency (IEA), the West's energy watchdog.