Oil rises, pares losses in January on hopes for production deal

Fri Jan 29, 2016 5:45pm EST
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices rose on Friday, rebounding more than 25 percent from 12-year lows hit last week and cutting losses for the month, on prospects of a deal between major exporters to cut production and curb one of the biggest supply gluts in history.

Oil also drew support from firmer stock markets, lifted by weak U.S. gross domestic product growth data that raised hopes the Federal Reserve may slow any planned interest rate hikes.

The oil market rallied for four straight sessions after a renewed call from the Organization of the Petroleum Exporting Countries for joint efforts with rival producers to cut supply triggered a volley of comments from Russia on a deal with the cartel, something it had been refusing to do for 15 years.

Brent March futures LCOc1, which expired on Friday, closed at $34.74 a barrel, 85 cents or 2.5 percent higher. On Jan. 20, it hit $27.10, its lowest since November 2003.

U.S. crude CLc1 settled up 40 cents or 1.2 percent, at$33.62 per barrel, having hit a high of $34.40 in the session.

For the week, Brent was 7.9 percent higher and U.S. crude 4.4 percent higher, paring their monthly losses to 6.8 percent and 9.3 percent respectively.

Both contracts briefly turned negative after the Wall Street Journal cited an Iranian oil official as saying the country would not join an immediate OPEC production cut.

Moscow has sent mixed signals, eventually saying veteran minister Sergei Lavrov, who almost never comments on oil policies, would visit the UAE and Oman to discuss oil markets.   Continued...

Pumpjacks and other infrastructure for producing oil dot fields outside of Watford City, North Dakota January 21, 2016. REUTERS/Andrew Cullen