Crude oil futures shot higher on Thursday after OPEC's second-biggest producer, Iran, suggested the cartel should increase supply limits by 1.5 million barrels per day, as much as one million bpd less than traders expected. NYMEX July crude hit an intraday high at $40.67 a barrel on ACCESS but retreated to $40.51 by 0509 GMT, a rise of 55 cents. London's IPE Brent crude jumped 64 cents to $37.50 a barrel. "The talk is of a lower OPEC output increase than we expected. It's a very strong market. There's a feeling among a lot of traders that yesterday's sell-off was overdone. People are coming in and taking new positions," said a broker based in New York.
An OPEC delegate said on Thursday that Iran had floated a proposal to the producers' cartel to raise output limits in June by 1.5 million bpd, with a further increase of up to one million bpd to be discussed later in the summer. Saudi Arabia, the world's biggest exporter, has proposed an immediate rise in the official production ceiling of 2-2.5 million bpd, while Algeria has suggested suspending official quotas altogether to tame oil prices that ran up to a 21-year peak at $42.45 a barrel this week. Ministers of the Organisation of the Petroleum Exporting Countries are scheduled to hold informal talks at 0900 GMT.///