You are here

Oil prices rebound as Opec announces meet

39274146.1 (39274154) - 31_07_2016 - OIL DRILLING.jpg
World oil prices rebounded Monday, with support coming from an announcement by Opec that the producers' cartel plans an informal meeting next month which may result in lower output.

[LONDON] World oil prices rebounded Monday, with support coming from an announcement by Opec that the producers' cartel plans an informal meeting next month which may result in lower output.

Around 1145 GMT, Brent North Sea crude for delivery in October was up 66 cents at US$44.93 a barrel compared with the close on Friday.

US benchmark West Texas Intermediate for September delivery won 53 cents to US$42.33 a barrel.

"Oil prices are climbing on rumours that global producers are mulling over... an oil output freeze deal," wrote analysts at oil broker PVM.

Opec on Monday announced an informal meeting of member countries in Algeria set for September.

The Vienna-based Organization of the Petroleum Exporting Countries said in a statement that the meeting would take place on the sidelines of the International Energy Forum in Algeria from September 26 to 28.

Opec last month said it expected the global supply glut to ease further this year and next thanks to reductions in oil output from producers outside the cartel, particularly the United States.

If accurate, this would be a vindication of its Saudi-led strategy since 2014 of squeezing non-Opec suppliers by keeping production at high levels despite low prices.

Prices have been fluctuating since entering a "bear" market last week, falling more than 20 per cent and closing below US$40 a barrel for the first time since April.

Initially recovering as US commercial crude inventory data showed an unexpected draw in gasoline, prices tumbled again later in the week after robust hiring numbers from the US government pushed the dollar higher.

A stronger greenback typically makes dollar-priced oil more expensive for consumers using other currencies, denting demand.

AFP