Oil prices jumped around 3% Monday on renewed speculation that OPEC would try to restrain oil output, which would help to ease oversupply worries that helped to push oil prices to their lowest point in the last three months just last week.
It was reported last week that OPEC countries such as Venezuela, Ecuador and Kuwait wanted to try again at jumpstarting cooperation between the 14-nation Organization of the Petroleum Exporting Countries and non-members such as Russia.
A similar attempt at such a move was made in April, but failed after Saudi Arabia backed out of talks in Doha, Qatar, citing Iran’s refusal to join in such a production freeze. Qatar’s energy minister and OPEC President Mohammad bin Saleh al-Sada said in a statement that the producer group was in “constant deliberations with all member states on ways and means to help restore stability and order to the oil market.”
The energy minister of Russia, the world’s largest oil producer, said that crude prices were not at levels that warranted intervention, though he remained open to negotiations.
“It would appear that OPEC calls for restraint would be inevitable”, said Jim Ritterbusch of Ritterbusch & Associates, a Chicago-based oil markets consultancy. He cited concerns over rising U.S. oil rig counts and weakening energy demand as catalysts for such actions from OPEC.
Last week the U.S. oil rig count rose for the sixth week in a row, and in China, fuel exports rose 50% from a year earlier to a monthly record 4.57 million tones, adding to the already oversupplied global amount.
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