Oil up 4 percent as Saudis mull meeting, tighter market forecast
By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices jumped the most in a month, rising more than 4 percent on Thursday, after comments from the Saudi oil minister about possible action to stabilize prices triggered a round of buying and the International Energy Agency forecast crude markets would tighten in the second half of 2016.
Saudi Energy Minister Khalid al-Falih said OPEC members and non-members would discuss the market situation, including any action that may be required to stabilize prices, during an informal meeting on Sept. 26-28 in Algeria.
The comments by the minister of the world's top oil exporter triggered fund buying and some short covering, giving a boost to prices, traders and brokers said.
Many traders remain skeptical of the outcome of the meeting, expecting a repeat of the Doha meeting in April when talks fell through after Saudi Arabia backed out, citing Iran's refusal to join in a so-called production freeze.
The IEA, which advises large developed economies on energy policy, forecast a healthy draw in global oil stocks in the next few months that would help ease a glut that has persisted since 2014 on the back of rising OPEC and non-OPEC supply.
"The markets clearly are deriving support from both the IEA report and statements from the Saudi oil minister," said Andrew Lebow, senior partner at Commodity Research Group in Darien, Connecticut.
"In a crude market that has seen a combined increase of 200,000 gross short speculative positions over just the past six weeks, any talk of a potential coordinated effort from producers, no matter how unlikely the prospect, will lead to short covering."
Both benchmarks notched their biggest daily percentage gain in a month. U.S. crude CLc1 settled at $43.49 per barrel, up $1.78 or 4.3 percent, while Brent crude LCOc1 closed $1.99 or 4.5 percent higher at $46.04, after both jumped more than 5 percent during the session. Continued...