Oil extended gains yesterday after closing at the highest level in three weeks amid speculation that crude producers will revive talks to stabilise prices.
Prices had climbed 6.4% last week as Saudi Arabia signalled it’s prepared to discuss stabilising markets at informal Opec discussions next month.
Russia is open to talks for a joint output freeze “if necessary,” its energy minister Alexander Novak said.
The current cycle of low oil prices will end by late 2017, while a balancing of the market will take place next year, Russia’s Mr Novak said in an interview
Oil has rebounded more than 10% since closing below $40 a barrel and tumbling into a bear market earlier this month.
Saudi Arabian Energy Minister Khalid Al-Falih said in a statement last week that talks with members of the Organisation of Petroleum Exporting Countries and other producers may result in action to stabilise the market, according to the state-run Saudi Press Agency.
“It’s really a question of whether the fundamental picture is going to improve and help us with a rally,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford in Connecticut.
“We’ll find out if we’re going to see a continued rebalance in the market, a tightened supply and demand picture, in the coming weeks,” said Mr McGillian.
Brent for October settlement added 33 cents, or 0.7%, to $47.30 a barrel on the London-based ICE Futures Europe exchange.
The global benchmark crude traded at a $1.76 premium to West Texas Intermediate for October delivery.
West Texas Intermediate for September delivery rose as much as 66 cents to $45.15 a barrel on the New York Mercantile Exchange, the highest since July 21, and was up 39 cents, or 0.9%, to $44.88 in New York trade.
Total volume traded was about 11% below the 100-day average. US producers added rigs for a seventh week, the longest run since 2014, according to Baker Hughes data on Friday.
Rigs targeting crude in the US increased by 15 to 396, the highest level since February.
Explorers have now added 66 rigs since June 24, led by rising activity in the Permian Basin.
Meanwhile, Venezuela has begun coordinating efforts among Opec members and producers outside the group including Russia, Venezuelan President Nicolas Maduro said on state television, while Nigeria will pump no more than 1.5 million barrels a day of oil this year amid sustained attacks by militants.
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