Oil at 2016 high above $40 per barrel after producer price support talk
By Barani Krishnan
NEW YORK (Reuters) - Global oil markets jumped more than 5 percent on Monday, with Brent hitting a 2016 peak above $40 a barrel, after Ecuador said it was holding a meeting of Latin American crude producers as OPEC sought a higher anchor price for oil.
Technically-driven buying in crude and a commodities rally also boosted oil. Industry data showing a smaller-than-expected build in stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude futures was another supportive factor.
Oil has rallied more than 50 percent since hitting 12-year lows less than two months ago. The rally began after Russia and the Organization of the Petroleum Exporting Countries floated the idea of a production freeze to support prices in an oversupplied market.
Ecuador's Foreign Minister Guillaume Long said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico "to reach consensus over oil, especially prices."
Separately, major OPEC producers are talking about a new oil price equilibrium of around $50, New York-based consultancy PIRA told Reuters.
"It's more confirmation that oil producers are close to achieving some kind of a deal on price support," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's feeding bullish sentiment into a market that's turned 180 degrees from where it stood just weeks ago."
Brent LCOc1, the global crude benchmark, settled up $2.12 at $40.84. Its session peak was $41.04, the highest since Dec. 9. That was 51 percent above the 12-year low of $27.10 on Jan 20.
U.S. crude CLc1 finished up $1.98 at $37.90 a barrel, near a 2-month high. On Feb. 11, it hit a 2003 low of $26.05. Continued...