Oil traded near the highest closing level in three weeks in NY amid speculation that crude producers will revive talks to stabilize prices.
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Brent oil jumped to $47.59, the most since July 18, while the United States benchmark WTI went up by 6.04%, the largest soar since April.
Futures rose as much as 1.5% after climbing 6.4% last week as Saudi Arabia signaled it’s prepared to discuss stabilizing markets at informal OPEC discussions next month.
Global demand for oil will slow at a greater rate than first thought in 2017, according to the latest oil-market update from the IEA, intensifying the oil industry’s supply-and-demand imbalance.
“We are cooperating in the framework of consultations regarding the oil market with OPEC countries and producers from outside the organisation, and are determined to continue dialogue to achieve market stability”, Russian energy minister Alexander Novak said, Asharq al-Awsat reported on Monday, according to Reuters.
“Arguably the chances of getting an output freeze in place now are less because the fundamentals of the oil market have improved of their own accord”, said Julian Jessop, head of commodities research at Capital Economics. Total volume traded was about 22% below the 100-day average.
Oil prices last week surged more than 4 percent after the International Energy Agency suggested the gap between supply and demand could narrow during the second half of the year. The contract increased 2 per cent to close at $46.97 on Friday.
Baker Hughes data released on Friday showed the number of rigs operating in the US rose by 15 last week to 396. Explorers have now added 66 rigs since June 24, led by rising activity in the Permian Basin.
Russian Federation and Saudi are probably the two most important oil producers on the planet, with Saudi Arabia the de-facto leader of OPEC, and Russian Federation the biggest non-OPEC producer.
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“In our view a renewed price correction can not be ruled out if market participants start focusing on the supply side again, for the latest drilling activity figures in the US cast doubts that the oversupply is really being eroded”, Commerzbank analyst Carsten Fritsch said in a note. Iran is working toward its 4 million barrels-a-day pre-sanction production levels.
