Oil up two percent on report of Saudi OPEC proposal, weaker dollar

Thu Dec 3, 2015 12:08pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Crude futures rose nearly 2 percent on Thursday, lifted by a weaker dollar and a report sourced to a senior OPEC delegate that Saudi Arabia would next year propose a deal to balance oil markets with non-OPEC help.

Short-covering after Wednesday's price slump of more than 4 percent also helped Brent and U.S. crude futures rebound.

Brent LCOc1 was up 80 cents, or 1.8 percent, at $43.29 per barrel by 11:30 a.m. EST (1630 GMT), after rising more than $1 earlier in the session. The global crude benchmark hit a session low of $42.43 on Wednesday, just 20 cents above a 6-1/2 year low set in August.

West Texas Intermediate (WTI) CLc1 was up 50 cents, or 1.3 percent, at $40.44 a barrel after its front-month January futures CLF6 hit a contract low of $39.84 on Wednesday.

Gains were pared after a Saudi oil source speaking to Reuters described as "baseless" the report by industry journal Energy Intelligence that the kingdom hoped to balance the market with production limits.

Top crude exporter Saudi Arabia has resisted production cuts to support prices in an oversupplied market.

Oil ministers from the Organization of the Petroleum Exporting Countries are gathered in Vienna for a meeting on Friday, and crude futures have been volatile, reacting to their official statements or off-the-cuff remarks.

"‎It is very difficult to cut 1 million bpd (barrels per day) collectively," a Gulf OPEC source told Reuters. "The Saudis do not want to change their previous talk. No cut without cooperation."   Continued...

Plants are pictured near an oil pump, owned by oil company Rosneft, in the settlement of Akhtyrskaya in Krasnodar region, southern Russia, December 21, 2014. REUTERS/Eduard Korniyenko