Oil prices extend OPEC-fuelled gains

opec

LONDON: Oil prices rose on Tuesday, building on strong gains won the previous session on expectations that OPEC could intervene to limit production.

Around 1200 GMT, Brent North Sea crude for delivery in October climbed 11 cents to $45.50 a barrel.

US benchmark West Texas Intermediate (WTI) gained 11 cents to $43.13 compared with Monday’s close.

“Oil prices are tentatively extending yesterday’s gains as the prospect of a coordinated oil production cut continues to underpin the energy complex,” PVM oil brokers said in a note to clients.

“Following reports that OPEC would be holding an informal meeting at the end of next month, Venezuela’s oil minister has hinted that a meeting of OPEC and non-OPEC producers may take place in the coming weeks.”

Prices hit two-week highs Monday, with Brent reaching $45.71 a barrel and WTI striking $43.39 after the Organization of the Petroleum Exporting Countries said the cartel would next month hold a meeting on the sidelines of the International Energy Forum in Algeria.

Oil futures then fell back on profit-taking before heading higher once more.

“News that OPEC would be having a September meeting with certain members keen to push for supply cuts… served as the impetus for oil prices to rally,” said Angus Nicholson, a strategist at IG Markets.

Chronic oversupply sent oil prices last week slumping into a so-called bear market, losing 20 percent from recent June peaks above $50.