Sentiment from last week on chances for the Organization of the Petroleum Exporting Countries (OPEC) to stabilize or limit oil production extended gains for crude futures in Asian trading today.
On the New York Mercantile Exchange, US crude oil futures for September delivery opened $44.62 a barrel, while Brent crude futures for October delivery started Monday’s market with $47.06 per barrel.
As of 08:30 AM GMT, US crude was up 1.19% to $45.03 and Brent oil higher at 1.06% to $47.47.
Crude prices have climbed for the third session in a row in European trade and have touched a three-week high: Brent oil hit an intraday peak of $47.59, the highest since July 18. US crude, meanwhile, reached a session high of $45.13, a level last seen in July 21.
Recent crude activity
So far in August, crude prices have nearly jumped 10%.
In the week prior, futures of oil rallied for the second consecutive day on Friday and closed the session carrying a three-week high on investors covering short positions.
This was after Saudi Arabia’s oil minister, Khalid al-Falih, dropped hints that the nation may be open to talks in the September OPEC conference along with non-members in stabilizing the oil prices.
Although oil capped some gains following a report that revealed the number of US oil rigs increased for the seventh straight week, intensifying worries over the already persistent global oil supply surplus.
Hints of an ongoing recovery in US drilling activity kept oil prices from rising. Baker Hughes, an oilfield service provider, said that the number of rigs drilling for oil climbed by 15 to a whopping 396 last week—the aforementioned seventh consecutive weekly increase and the 10th rise within 11 weeks.
This continued escalation is US drilling sparked talks that domestic output could be on the edge of rebounding in the coming months.
Meanwhile, for this week, crude oil traders will turn their attention to US stockpile data on Tuesday and Wednesday for new supply and demand signals.
OPEC on possible act to limit production
The 14-member oil bloc will meet on the sidelines of an energy conference set in Algeria from September 26 – 28, rekindling the thought of a coordinated output control.
However, there are market participants who are doubtful that the meeting will bear fruit in any actual decision or action to freeze production. An effort to jointly freeze output levels earlier in 2016 did not succeed after Saudi Arabia pulled out over Iran’s rejection to be a part of the initiative.
Crude continues to go on an upward momentum with growing expectations that there will be producer actions coming from the OPEC meeting.
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