Oil ends up 3 percentt as OPEC meets; volatility hits post-Doha high

Mon Sep 26, 2016 4:33pm EDT
 
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By Barani Krishnan and Amanda Cooper

NEW YORK/LONDON (Reuters) - Oil settled up 3 percent on Monday as the world's largest producers gathered in Algeria to discuss ways to support prices, with nervous trade driving volatility to its highest since a similar meeting to freeze output in April in Doha which failed.

The Organization of the Petroleum Exporting Countries and other oil producers led by Russia are meeting informally on the sidelines of the International Energy Forum in Algeria from Sept. 26-28 to tackle a crude glut that has battered prices for two years now.

Key OPEC member Iran, the fourth largest crude exporter which is still trying to recapture output before Western sanctions in 2012, downplayed the chances of a deal while some OPEC members remained hopeful.

"Unless there's an impressive production cut by OPEC on top of a freeze, I think we'll give back everything we've gained by the end of this week," said Tariq Zahir, an oil bear at Tyche Capital Advisors in New York.

Brent crude futures LCOc1 settled up $1.46, or 3.2 percent, at $47.35 a barrel after trading between $45.74 and $47.66.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose $1.45, or 3.3 percent, to settle at $45.93 after a session high of $46.20 and low of $44.43.

Both benchmarks moved in a near $2-band between the highs and lows, one of the widest swings in weeks.

Implied volatility, a gauge of how much oil prices move, was at its highest since April 18, when the meeting in Doha among OPEC members to discuss an output freeze ended in an impasse, leaving crude at just above $40.   Continued...

 
A worker looks on at the Bashneft-Ufaneftekhim oil refinery outside Ufa, Bashkortostan, Russia January 29, 2015. REUTERS/Sergei Karpukhin/File Photo