Oil prices rose nearly 2 percent on Monday, after Venezuela said OPEC and non-OPEC producers were close to reaching an output deal and as clashes in Libya raised concerns that efforts to restart crude exports could be disrupted.
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U.S. West Texas Intermediate (WTI) crude futures closed up 27 cents U.S., or 0.6 per cent, at US$43.30.
A tanker returned to Libya’s third-biggest oil port to load a cargo one day after clashes forced it to halt the first export from the Ras Lanuf terminal since 2014.
CMC Markets Singapore analyst Margaret Yang said traders are also “waiting for this week’s (US) crude inventory data to find clues of any changes of the supply-demand relationship”.
On Monday, the price of oil rallied after Venezuela announced that a deal, which would stabilize the global supply of oil was imminent between both OPEC member nations and producers outside the oil cartel.
Natixis analyst Deshpande Abhishek told the news agency: “We think there is a great window of opportunity for a freeze here”.
Also lifting the WTI crude oil price today was news that a military conflict in Libya affected the country’s oil exports over the weekend.
OPEC members and Russian Federation are due to hold an informal gathering in Algeria at the end of September to talk about freezing oil production levels.
“President Maduro: We are nearing an agreement between OPEC and non-OPEC countries to stabilise the market”, the state-owned oil company PDVSA posted on its Twitter page.
OPEC members want to push oil prices up to $55 or $60 a barrel from current levels.
“We are close to an agreement between OPEC and non-OPEC countries to stabilize the market”, Maduro said, according to Petroleos de Venezuela.
Despite the bearish market mood on Monday, hedge funds scaled back some of their short positions in crude oil futures and options after prices failed to fall further, suggesting the market was running out of negative momentum.
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At the Multi Commodity Exchange, crude oil for delivery in September was trading higher by Rs 49, or 1.70 per cent, to Rs 2,934 per barrel in a business turnover of 2,932 lots. Opec ministers can transform the gathering into an extraordinary meeting since they will all be present, Algerian Energy Minister Noureddine Bouterfa said on public radio. He has said the Algiers meeting was for consultations and not decision-making.
