Oil jumps 8 percent, biggest three-day surge since 1990
By Robert Gibbons
NEW YORK (Reuters) - Oil futures soared on Monday for a third consecutive day, rising more than 8 percent, as a downward revision of U.S. crude production data and OPEC's readiness to talk with other producers helped extend the biggest three-day price surge in 25 years.
U.S. crude oil prices have skyrocketed more than $10 a barrel in three days, erasing the month's declines as a series of relatively small-scale supply disruptions and output risks prompted bearish traders to take profits on short positions, which had been near a record a week ago.
On Monday, prices fell initially but reversed course mid-morning. The three-day gains were more than the 20 percent mark that often signals a bull market. Even so, few were prepared to call a definitive end to the slump.
"Sharp gains over the past three trading sessions were driven by a combination of short covering and chart-readers again looking to call a bottom falsely," Citi said in a report, saying that prices may yet test new lows before year's end.
Brent LCOc1 October futures rose $4.10, or 8.2 percent, to settle at $54.15 a barrel, with volumes relatively muted by a British public holiday.
U.S. crude CLc1 gained $3.98, or 8.8 percent, to settle at $49.20 a barrel, taking three-day gains to 27.5 percent, the most over three days since August 1990. In dollar terms, it is the biggest three-day gain since February 2011.
While some analysts have been expecting prices to rebound after a one-third slump since late June, most have been shocked by the whiplash of the past few days, and wondered whether it was an overreaction to headlines.
On Monday, some cited a commentary in the latest OPEC Bulletin publication suggesting the group may be increasingly willing to talk to other producers about curbing output, even though it was broadly in line with previous comments. There has been no indication this summer that core Gulf OPEC members are pushing for more talks. Continued...