Oil Price Gains 2% As Producers Seek Cooperation

Oil price inched up nearly 2 percent on Tuesday, August 16, hitting five-week highs for a second straight day as sources at Organisation of Petroleum Exporting Countries, OPEC spoke of Saudi Arabia’s interest for higher crude prices while Russia met the producer group to discuss the market.
The dollar’s crash to an eight-week low also buoyed crude prices, as did the loss of more than 700,000 barrels per day (bpd) in Nigerian output to militant attacks and pipeline problems, Reuters reports

Brent crude settled up 88 cents, or 1.8 percent, at $49.23 a barrel. It rose more after settlement, reaching $49.36, its highest since July 7.

U.S. West Texas Intermediate crude rose 84 cents, or 1.8 percent, to settle at $46.58. It reached $46.73 after settlement, its highest since July 12.

The cartel may revive talks on freezing oil output levels when it meets non-OPEC nations next month, OPEC sources told Reuters, citing Saudi Arabia’s wish for higher prices.

Russian and OPEC energy officials discussed oil markets at a meeting in Vienna, Russia’s Energy Ministry said. Another “energy dialogue” between Russia and OPEC has been scheduled there for October.

“While it is tempting to dismiss the OPEC chatter as a non-factor intended to talk up prices, we are also resigning to a momentum shift in which our technical indicators are flashing green lights in favor of further crude price rallies of at least a couple of dollars a barrel,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Prices pared some gains in after market trade after data from the American Petroleum Institute showing an unexpected draw in U.S. crude stockpiles was overshadowed by surprise hefty builds in gasoline and distillates, indicating the glut in refined oil products was growing.

Official inventory data from the U.S. Energy Information Administration is due on Wednesday at 10:30 a.m. (1430 GMT). Technical analysts said oil could set 2016 highs in four to six weeks if Brent crosses $50 and U.S. crude $48.

Brent and WTI have both gained about 11 percent since Thursday after Saudi Energy Minister Khalid al-Falih said the kingdom would work with other producers to stabilise the market..

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