Oil prices rebounded more than four per cent today on renewed hopes of an Opec output cut deal.
After falling to a three-month low on Monday, global benchmark Brent crude prices were up 4.3 per cent, or $1.91 cents, to $46.34 this evening, while US sweet crude was buoyed 4.7 per cent, or $2.03, reaching $45.34 a barrel.
The uplift came as investors grew more confident that the 14-member Organisation of the Petroleum Exporting Countries (Opec) will deliver on touted production cuts when it meets on 30 November.
Saudi Energy Minister Khalid al-Falih and Russian energy minister Alexander Novak could meet in Qatar this week on the sidelines of a major energy forum, sources told Reuters.
“A last round of diplomatic efforts amongst oil ministers has rekindled some hope of an Opec oil meeting, carrying oil prices off three-month lows,” said Jasper Lawler, analyst at CMC Markets.
At the Vienna meeting at the end of the month, Opec is planning to agree on a freeze or cut to oil production among its member states. It is also hoping non-Opec oil producers will piggyback on the move, which it is hoped will stem a global supply glut weighing on the market.
In September, Opec provisionally agreed to slash production by 700,000 bpd, which would take production to between 32.5m and 33m bpd. Analysts have been sceptical it will finalise the pledge, as squabbles between members have beset the consortium.
Last week, the International Energy Agency warned of “relentless” oversupply in 2017 and estimated members of the group pumped 33.8m bpd in October, “well in excess of the high end of the proposed output range”.
The price of West Texas Intermediate crude was lifted earlier in the day by shale oil data, released by the US Energy Information Administration on Monday, which forecast a 20,000 barrels per day (bpd) decline to 4.5m bpd in December. This would be the sector’s lowest output since April 2014.