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Oil rises on Iraq attack, possible cuts by OPEC

NEW YORK -- Oil prices rose more than $1 a barrel yesterday after an attack on an oil facility in Iraq and after Saudi Arabia's oil minister said OPEC might decide to cut output again when it meets next month.

Light sweet crude for January delivery rose $1.08 to settle at $60.32 a barrel on the New York Mercantile Exchange. Brent crude closed 41 cents higher at $60.44 per barrel on the ICE Futures Exchange in London.

A mortar attack started a huge fire last night at an oil facility near Kirkuk in Iraq, shutting the flow of crude oil to a major refinery. While the markets responded with a small rally, the effect of the news was minimal, according to Alaron Trading Corp. analyst Phil Flynn.

Crude prices seemed to respond more to hawkish comments from the Saudi oil minister this weekend. London-based newspaper Al-Hayat said Saudi oil minister Ali al-Naimi had indicated the organization would evaluate the effect of October's decision when it meets next month in Abuja, Nigeria, and if necessary, authorize another cut.

"OPEC has been saying this for weeks now, but when the Saudis say it, the markets take it more seriously," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York.

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