Oil prices rose by 2 percent on Monday after Venezuela hinted that OPEC and other major oil producers could agree to a market support deal and as clashes in Libya disrupted attempts to boost crude exports.
U.S. gasoline futures fell slightly on profit-taking from last week’s rally on the outage of a key gasoline pipeline due to a leak, reports Reuters.
Oil was also supported by higher equity prices on Wall Street and a weaker dollar that made greenback-denominated commodities, such as crude, more affordable to holders of the euro and other currencies.
A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie
Brent crude futures were up 98 cents, or 2.1 percent, at $46.75 a barrel by 11:07 a.m. EDT (1507 GMT). U.S. West Texas Intermediate (WTI) crude futures rose by 97 cents, or 2.2 percent, to $44. U.S. gasoline futures fell 0.4 percent to $1.4556 per gallon.
Last week, Brent hit a two-week low and WTI fell to a five-week low on concerns about oversupply with more deliveries from Libya and Nigeria.
Clashes in Libya on Sunday, however, halted the loading of the first oil cargo from the port of Ras Lanuf as the state-run National Oil Corporation prepared to restart exports from the ports blockaded for several years.
Oil prices also rose after Venezuelan President Nicolas Maduro said on Sunday that the Organization of the Petroleum Exporting Countries and other major oil producers were close to reaching a deal on price stability that could be announced later this month.
OPEC and non-OPEC members are to meet on the sidelines of an industry conference in Algeria next week for talks on the potentially freezing oil production.
OPEC members may call an extraordinary meeting to discuss oil prices if they reach consensus, OPEC Secretary-General Mohammed Barkindo said on Sunday. OPEC’s all-important policy meeting is due in November.
In the past, analysts have persistently discounted the possibility that OPEC members such as Saudi Arabia, Iran, Nigeria and Libya will agree to production curbs as they ramped up output to protect market share.
Speculators’ net long positions in Brent have stabilized at around levels seen in mid-August as hedge funds bet on the possibility of an oil output deal, data from last week showed.
A production freeze will be “a win-win for OPEC and Russia, as Iran is unlikely to add extra production anyway for the next six-12 months,” Natixis analyst Deshpande Abhishek said.