Oil is heading for its biggest weekly advance since April amid speculation informal OPEC talks next month may lead to stabilization measures after prices tumbled into a bear market.
Futures climbed as much as 0.8 per cent in New York after surging 4.3 per cent Thursday.
Discussions with members of the Organisation of Petroleum Exporting Countries and non-OPEC producers may include possible action to stabilise the market, Saudi Arabia’s Energy Minister Khalid Al-Falih said in a statement, according to media reports, including Reuters.
Global markets will continue to rebalance this year, according to the International Energy Agency.
Oil has fluctuated after falling more than 20 per centinto a bear market and closing below $40 a barrel last week for the first time in almost four months.
Refiners around the world will process record volumes of crude this quarter as their intake rebounds, shrinking brimming crude supplies, the IEA said in its monthly report on Thursday.
“The Saudi comments gave the market some life,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
“The talk is all about pushing the price higher and the market will speculate on whether they can actually pull a deal together. Calls from the IEA that the glut will start to shrink and consumption will pick up are also supportive.”
West Texas Intermediate for September delivery rose as much as 36 cents to $43.85 a barrel on the New York Mercantile Exchange and was at $43.82 at 12.10pm Hong Kong time. The contract gained $1.78 to $43.49 on Thursday, rebounding after a 3.1 per cent drop during the previous two sessions.
Total volume traded was about 23 per cent above the 100-day average. Prices are up 4.9 per cent this week.
Brent for October settlement increased as much as 26 cents, or 0.6 per cent, to $46.30 a barrel.
The contract rose $1.99, or 4.5 per cent, to $46.04 a barrel on Thursday.
Prices are up 4.6 per cent this week. The global benchmark crude traded at a premium of $1.72 to WTI for October.
OPEC will hold informal talks at the International Energy Forum in Algiers, Mohammed Al Sada, Qatar’s energy minister and holder of OPEC’s rotating presidency, said in a statement on Monday.
Bloomberg
