Oil rebounded today after tumbling to $50 a barrel after speculation heightened that Opec, the cartel of oil producing nations, will cut supplies to stop the steep fall in prices.

US oil recovered from a 22-month low when it rose 85 cents to $57.01 while Brent crude regained some ground, increasing to $52.85 after falling to just above $50 a barrel.

Since mid-July, when oil hit a peak of $147.27, prices have fallen by over 60 per cent on fears that the world's largest economies would cut demand as they struggle with shrinking GDP.

It emerged today that the US trade deficit in September narrowed more than forecast because a record decline in the cost of foreign crude oil caused fuel imports to fall.

The gap shrank 4.4 percent to $56.5 billion, the smallest in almost a year, from $59.1 billion in August, the Commerce Department said.

The International Energy Agency cut its global oil demand growth forecast for 2009 and said this year's increase in consumption has been the slowest since 1985.

Demand is predicted to rise by 350,000 barrels a day, a 340,000 fall on previous forecasts.

However, there are rumours that Opec, which produces around 40 per cent of the world's oil, is considering holding an emergency meeting at the end of this month to discuss reducing output after agreeing to cut daily supplies by 1.5 million barrels last month.

Last month, Chancellor Alistair Darling increased pressure on major oil companies to pass on the falling price of crude after BP and Shell reported record quarterly profits.

In contrast, since oil prices have started to fall, Britain's major supermarkets have cut the cost of petrol on their forecourts.

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