Prospects of oil prices gaining stability emerged yesterday as price gained 38 Cents from multi-week lows after Venezuela said OPEC and non-OPEC producers were close to a deal to stabilize the market.
Also clashes in Libya which disrupted attempts to boost crude exports helped the price to leap.
Brent crude futures were $46.15 per barrel up by 38 cents from their previous settlement but off an earlier peak of 46.62.
Venezuelan President Nicolas Maduro said a deal could be announced this month to stabilize oil markets, which have come under pressure due to persistent oversupply.
“We think there is a great window of opportunity for a freeze here,” Natixis analyst Deshpande Abhishek said. “It will not just help balance the markets, but it is also a win-win for OPEC and Russia, as Iran is unlikely to add extra production anyway for the next 6-12 months.”
Crude exports from OPEC’s third-biggest producer Iran jumped 15 percent in August from a month ago to more than 2 million barrels per day, according to a source with knowledge of its tanker loading schedule, closing in on shipment levels seen five years ago before Western sanctions.
Last week, Brent hit a two-week low and U.S. crude fell to a five-week low on concerns about oversupply with more deliveries from Libya and Nigeria.
But yesterday, an ICE exchange data showed hedge funds and other large money managers have raised their weekly bets on rising crude oil prices, with net long positions in Brent stabilizing around levels seen in mid-August when the market got the first indications of a possible OPEC output deal.
Prices were also supported by a weaker dollar and as the expected boost to Libyan exports was delayed.
Clashes in Libya have halted the loading of the first oil cargo from the port of Ras Lanuf in close to two years and raised fears of a new conflict over Libya’s oil resources.
However, concerns about rising supplies remain a bugbear and preliminary Angolan November loading plan showed supplies were set to bounce back from a 10-year low.