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Oil prices continue to move upwards

London, Sept. 29 (Reuters): Oil prices made fresh gains on Monday as the Organisation of the Petroleum Exporting Countries (Opec) reiterated hopes that non-Opec producers will join the cartel in cutting supply to defend a $25 target price.

Brent crude in London was 36 cents up at $27 a barrel, while light crude in New York was 34 cents higher at $28.50.

Prices have jumped 6 per cent since Opec agreed last week to cut supply by 900,000 barrels per day, or 3.5 per cent, from November 1 even as demand for their fuel rises ahead of the winter.

The group, which controls around half the world’s exports, was acting to stop a forecast glut building as Iraq’s post-war production slowly recovers and non-Opec supply swells from the former Soviet Union.

Opec ministers have said they also expect non-Opec to curb supply to support prices within the cartel’s $22-$28 target range if necessary.

“Opec sees incoming oil oversupply of 1.4 million barrels per day in the world market which brings concerns of falling oil prices,” said Purnomo Yusgiantoro, the Indonesian mines and energy minister.

“If there will be 1.4 million barrels of oversupply next year and we have decided to cut 900,000 barrels of production this year then we hope non-Opec countries will cut some 500,000 barrels per day,” said Purnomo, who will take over as Opec president on January 1.

Russian President Vladimir Putin had said that non-Opec Russia might restrain oil exports if prices drop drastically.

“The government has instruments with the help of which we can regulate oil deliveries to the world market. Pipelines and railways are in government’s hands and if we see that oil prices become unfair we shall use these instruments,” Russian news agency Interfax quoted Putin as saying on a visit to New York.

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