Oil extends rally to five-week highs on talk of producer action
By Barani Krishnan
NEW YORK (Reuters) - Oil prices hit five-week highs on Monday, gaining 10 percent or more in a three-day rally as speculation intensified over potential producer action to support prices amid a crude glut.
Data from market intelligence firm Genscape estimating a draw of more than 350,000 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures last week added to the bullish sentiment, said traders who saw the data.
Separately, a Reuters poll indicated total U.S. crude inventories may have fallen too last week.
Brent crude LCOc1 settled up $1.38, or 2.9 percent, at $48.35 a barrel. Minutes after the close, it extended gains, reaching $48.46, its highest since July 12. Brent has gained about 10 percent cumulatively in the past three sessions, its most in such a stretch since May. Since the start of August, it has risen nearly 14 percent.
U.S. West Texas Intermediate (WTI) crude CLc1 rose $1.25, or 2.8 percent, to settle at $45.74 a barrel. It also rallied post-settlement to $45.87, its highest since July 21. WTI has gained 10 percent on the month.
Russian Energy Minister Alexander Novak bolstered hopes on Monday that oil producing nations could take action to stabilize prices.
The market started to rally on Thursday after Saudi energy minister said non-members and members of the Organization of the Petroleum Exporting Countries (OPEC) are to meet on the sidelines of the International Energy Forum, which groups producers and consumers, in Algeria from Sept. 26-28.
"While we see very little possibility of an actualization of curtailed OPEC output, there will likely be enough chatter during the next five to six weeks to deter selling in allowing WTI to gravitate at around the $45 area, at least through the second half of this month," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates. Continued...