Oil prices swung wildly today as traders weighed diminished concerns over rising US stockpiles against the broader market outlook.
Brent crude, the global benchmark, jumped as much as 0.76 per cent to $46.30 per barrel as a key US petrol pipeline was on pace to return to service following an outage, offsetting concerns over a potential rise in crude stockpiles.
Its US counterpart, West Texas Intermediate crude, also rose as much as 1.73 per cent to $44.05.
The benchmarks had touched six-week lows earlier in the day after a Reuters poll suggested US crude oil inventories rose to 2.3m barrels in the week to 16 September, feeding into ongoing concerns about the persistent oversupply.
Industry group the American Petroleum Institute is due to release its weekly crude stocks data later this evening.
It came as Venezuela's oil minister, Eulogio Del Pino, said that the global oil supply of 94m barrels per day must fall by about a tenth to match consumption.
"Global production is at 94m barrels per day, of which we need to go down nine million barrels per day to sustain the level of consumption," Del Pino said in an interview with state oil company PDVSA's internal TV station.
This outweighed comments made by Opec Secretary-General Mohammed Barkindo, and reported by RIA news agency, that a potential deal between oil producers to freeze output levels could last one year, longer than previously expected.
And Algeria's energy minister, Noureddine Bouterfa, said yesterday that he was "optimistic" participants would reach consensus on how to prop up the oil market.
Oil prices had edged higher yesterday after Venezuela's president, Nicolas Maduro, said a deal to curb the oversupply of crude between Opec and non-Opec producers could come as early as this month.
And yet analysts remain sceptical of the world's biggest producers' ability to agree an output freeze deal at talks due to take place next week.
Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, said in a note today: "We see no chance of a production freeze agreement materialising.
"If a deal should materialise it would be a conditional deal where Iran, Libya, Nigeria and Venezuela are allowed to lift their production.
"That would place an Opec production 'freeze cap' at about 36.2m barrels per day versus an August production of 33.7m bpd. Not much of a freeze in our view."