As the dollar weakened against the euro oil prices have sky-rockettedand on evidence that OPEC crude exporters were cutting production as promised, analysts said.

Earlier in the day the price of Brent North Sea crude sank close to a 21-month low point under $US59 per barrel as traders sold amid weak energy demand worldwide, they added.

Prices had fallen sharply also on market jitters about the outcome of the US presidential election, said market watchers.

Brent North Sea crude for December delivery stood at $US66.55 per barrel, up $US6.07 from Monday’s close.

“You’re just seeing the dollar give back a lot of its gains in [the] last couple sessions. That’s leading a lot of commodities higher,” said Raymond Carbone, president of brokerage Paramount Options, cited by Dow Jones Newswires.

A weaker dollar makes oil priced in the US unit cheaper for buyers holding stronger currencies, pushing up demand. On Tuesday the euro jumped back above $US1.30 in late European deals.

Earlier on Tuesday Brent slumped to $US58.38, the lowest level since February 21, 2007.

At 5:50pm (GMT) New York’s main contract, light sweet crude for December delivery, stood at $US70.55 per barrel, up $US6.64. Earlier it had fallen to $US62.25.

Analysts said that prices rebounded also on news that OPEC producers were implementing cuts to output, as was pledged at a meeting of the cartel last month.

Algeria has slashed oil production by 71,000 barrels per day to honour a OPEC decision to reduce global daily output by 1.5 million bpd, the APS news agency reported.

Algeria produced as many as 1.45 million bpd before the energy ministry implemented the cuts.

OPEC said last month it would reduce production to halt the slide in oil prices, which have lost more than half their value since striking record highs above 147 dollars a barrel in July when fears of supply disruptions sent them rocketing.

But OPEC’s decision to slash output by 1.5 million barrels a day from November 1 will not immediately shore up prices, the cartel’s chief, Algerian Energy Minister Chakib Khelil, said last weekend.

The Organisation of Petroleum Exporting Countries, whose members pump about 40 per cent of the world’s oil, holds its next scheduled output meeting in Oran, Algeria, on December 17.