The price of North Sea oil has bounced back above $80 a barrel amid speculation that Opec will agree to cut production next week at a key meeting in Vienna.

The value of benchmark Brent crude has plunged in recent months from $115 in June to as low as $77. Demand has stalled as global economic growth has slowed and expanding US oil shale supplies flooded the market.

A growing number of Opec members led by Venezuela, Ecuador and Libya have called for the cartel to curb its production in an attempt to force up prices closer to the $90 that most of them want.

Some traders and oil analysts, including those at Bank of America Merrill Lynch, believe that up to 500,000 barrels a day could be sliced off Opec quotas.

“They’re running around like chickens without a head, but they’re going to do something,” Francisco Blanch, the bank’s head of global commodities, told CNBC.

Oil prices were also pushed up on Friday by positive data on the state of the US economy, with jobless totals down, home sales strengthening and factory activity growing at its fastest pace in two decades.

But not everyone believes OPEC will come to a definite decision, not least because its most influential member, Saudi Arabia, has indicated it is willing to see prices fall further.

“There are mixed messages from OPEC – it’s going to be a very interesting meeting. Will Saudi Arabia still be the kingpin or will it create a bit of dissent between those members who want to maintain production and others who want to cut output?” Jonathan Barratt, chief investment officer at financial adviser, Ayers Alliance, told Reuters.

Victor Shum, the managing director of downstream energy consulting with the IHS consultancy, was even more downbeat: “It will be very difficult for Opec to agree a cut and announce a headline number.”

The precipitous fall in oil prices since the summer was largely unpredicted by the industry and has spawned a raft of conpiracy theories.

Some believe that Opec has been happy to encourage a fall in a bid to undermine the American shale “revolution”, which has turned the US from a massive importer to a potential exporter of oil.

Shale oil production has risen by 1m barrels a day in the past 12 months alone so that US output has reached 9m barrels – its highest level for almost 30 years.

Local oil and gas prices have slumped and spawned a manufacturing boom but all this could be threatened because the costs of extracting shale are high.

Other theories suggest that Opec and the US are working together to reduce crude values to put further pressure on Russia over Ukraine. The Russian economy is heavily dependent on commodity prices and the rouble has been heavily hit by the downturn in oil and gas prices.

Shares in the oil production and services sector have fallen heavily since the summer and triggered a raft of merger and acquisition activity. Last week, Halliburton, the world’s second largest services group, revealed it was in takeover talks with the number three group, Baker Hughes.

But while the price slump has hit producing companies and countries, it represents a boost to the many more countries that are heavily dependent on energy imports. Lower energy prices cut the cost of manufacturing and transport, lowering inflation rates and potentially encouraging more global economic output.

In 2008, before the financial crash, the cost of Brent blend reached $148 while in the late 1990s the cost was down to below $10

http://www.theguardian.com/business/2014/nov/21/north-sea-oil-price-opec-talks-vienna