(Australian Associated Press)
REUTERS – Oil prices are more than two per cent higher amid renewed speculation that OPEC will try to restrain output, easing oversupply worries that’s pressured the market to three-month lows.
The Wall Street Journal last week reported that OPEC countries such as Venezuela, Ecuador and Kuwait want to take another stab at co-operation between the 14-nation Organization of the Petroleum Exporting Countries and non-members such as Russia.
The last such initiative, in April, failed after Saudi Arabia backed out of talks in Doha citing Iran’s refusal to join in a so-called production freeze.
Qatar’s Energy Minister and OPEC President Mohammad bin Saleh al-Sada hinted at overtures of co-operation in a statement on Monday.
OPEC members are to have an informal meeting on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria from September 26-28.
The energy minister of Russia, the world’s biggest oil producer, said crude prices were not at levels that warranted intervention, but he remained open to negotiations with OPEC.
“It would appear that OPEC calls for restraint would be inevitable,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates, citing concerns over rising numbers of US oil rigs and weakening energy demand.
The US oil rig count rose last week for a sixth week in a row.
In China, fuel exports increased more than 50 per cent from a year earlier to a monthly record 4.57 million tonnes, adding to a global glut.
US West Texas Intermediate (WTI) crude settled up $1.22, or 2.9 per cent, at $US43.02 per barrel. WTI hit April lows beneath $US40 a barrel last week.
Brent crude rose $US1.12, or 2.5 per cent, to settle at $US45.39.
Some fund managers were pessimistic the OPEC-fuelled rally would last. Crude prices rallied nearly four per cent at the session peak only to pare gains toward the close. They gave up more gains in post-settlement trade after news that the Louisiana Offshore Oil Port will have an additional 2.5 million barrels in oil capacity by April 2017.
“Until proven otherwise, this is still a correction in a bear market,” said Matthew Tuttle, chief executive at Tuttle Tactical Management in Riverside, Connecticut.
“You can have massive up moves like this, and if you can trade it, great. But if you’re looking at another run up to $50 and beyond, I’m not ready to go there. I think we still see under $US35 a barrel before we get to $US50.”