Singapore — Oil prices rose about 2% on Tuesday, bouncing
back from multimonth lows on optimism that Opec will agree later this
month to cut production to reduce a supply glut.
North Sea Brent crude oil was up 75c a barrel at $45.18 by 9.15am GMT after hitting a three-month low of $43.57 on Monday.
US light crude oil rose $1.11 a barrel, or 2.5%, to a high of $44.43 before easing to $44.30. It reached a three-month low of $42.20 on Monday.
Opec member nations meet on November 30 to consider an output limit. An outline deal was reached in September, but talks on detail are said to be proving difficult. The oil cartel is politically and economically diverse, and several members wish to raise production.
Saudi Arabia’s energy minister has said it is imperative for Opec reach a consensus on a deal to curb production, Algeria’s state news agency APS reports.
"Reports of a diplomatic push by Opec to strike a deal are supporting the markets," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. "The rally could last a little while, but the underlying fundamental picture is still bearish."
IG Group market strategist Jingyi Pan said market sentiment was buoyed by reports that key producers including Iran and Iraq were thinking of restraining production. "News of Qatar, Algeria and Venezuela leading the push for the Opec deal were music to the ears for oil traders, boosting crude oil prices," Jingyi Pan said.
Prices were also buoyed by expectations that US shale oil production will in December fall to its lowest since April 2014 at 4.5-million barrels a day.
Technical analysts said oil markets were due to an upward correction after a month of falls.
Philips Futures investment analyst Jonathan Chan in Singapore said crude prices were supported by short-covering. "The current active contract (for US crude) is expiring.
The last trading day is next Monday, so some oil traders are already starting to close out their positions to roll over," Chan said.
But rising Libyan oil production could cap gains. A tanker carrying the first freshly produced cargo of Libyan crude to be exported since the Ras Lanuf terminal reopened in September left the port on Monday. Libyan oil production almost doubled to about 600,000 bpd in recent weeks.
Reuters
North Sea Brent crude oil was up 75c a barrel at $45.18 by 9.15am GMT after hitting a three-month low of $43.57 on Monday.
US light crude oil rose $1.11 a barrel, or 2.5%, to a high of $44.43 before easing to $44.30. It reached a three-month low of $42.20 on Monday.
Opec member nations meet on November 30 to consider an output limit. An outline deal was reached in September, but talks on detail are said to be proving difficult. The oil cartel is politically and economically diverse, and several members wish to raise production.
Saudi Arabia’s energy minister has said it is imperative for Opec reach a consensus on a deal to curb production, Algeria’s state news agency APS reports.
"Reports of a diplomatic push by Opec to strike a deal are supporting the markets," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. "The rally could last a little while, but the underlying fundamental picture is still bearish."
IG Group market strategist Jingyi Pan said market sentiment was buoyed by reports that key producers including Iran and Iraq were thinking of restraining production. "News of Qatar, Algeria and Venezuela leading the push for the Opec deal were music to the ears for oil traders, boosting crude oil prices," Jingyi Pan said.
Prices were also buoyed by expectations that US shale oil production will in December fall to its lowest since April 2014 at 4.5-million barrels a day.
Technical analysts said oil markets were due to an upward correction after a month of falls.
Philips Futures investment analyst Jonathan Chan in Singapore said crude prices were supported by short-covering. "The current active contract (for US crude) is expiring.
The last trading day is next Monday, so some oil traders are already starting to close out their positions to roll over," Chan said.
But rising Libyan oil production could cap gains. A tanker carrying the first freshly produced cargo of Libyan crude to be exported since the Ras Lanuf terminal reopened in September left the port on Monday. Libyan oil production almost doubled to about 600,000 bpd in recent weeks.
Reuters
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