🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

UPDATE 8-Oil up 4 pct as Saudis mull meeting, tighter market forecast

Published 12/08/2016, 05:22 am
© Reuters.  UPDATE 8-Oil up 4 pct as Saudis mull meeting, tighter market forecast
LCO
-
CL
-
NYF
-
GPR
-

* OPEC members, non-members to discuss price stabilization in Sept

* Market should rebalance through second half 2016 -IEA

* Brent, WTI post biggest daily percentage gain in a month

* U.S. diesel cracks jump nearly 8 pct on Motiva refinery fire (Adds settlement prices, comment, milestones)

By Devika Krishna Kumar

NEW YORK, Aug 11 (Reuters) - Oil prices jumped the most in a month, rising more than 4 percent on Thursday, after comments from the Saudi oil minister about possible action to stabilize prices triggered a round of buying and the International Energy Agency forecast crude markets would tighten in the second half of 2016.

Saudi Energy Minister Khalid al-Falih said OPEC members and non-members would discuss the market situation, including any action that may be required to stabilize prices, during an informal meeting on Sept. 26-28 in Algeria. comments by the minister of the world's top oil exporter triggered fund buying and some short covering, giving a boost to prices, traders and brokers said.

Many traders remain skeptical of the outcome of the meeting, expecting a repeat of the Doha meeting in April when talks fell through after Saudi Arabia backed out, citing Iran's refusal to join in a so-called production freeze.

The IEA, which advises large developed economies on energy policy, forecast a healthy draw in global oil stocks in the next few months that would help ease a glut that has persisted since 2014 on the back of rising OPEC and non-OPEC supply. markets clearly are deriving support from both the IEA report and statements from the Saudi oil minister," said Andrew Lebow, senior partner at Commodity Research Group in Darien, Connecticut.

"In a crude market that has seen a combined increase of 200,000 gross short speculative positions over just the past six weeks, any talk of a potential coordinated effort from producers, no matter how unlikely the prospect, will lead to short covering."

Both benchmarks notched their biggest daily percentage gain in a month. U.S. crude CLc1 settled at $43.49 per barrel, up $1.78 or 4.3 percent, while Brent crude LCOc1 closed $1.99 or 4.5 percent higher at $46.04, after both jumped more than 5 percent during the session.

Many analysts say they see oil prices trading within a range for the next few weeks, but if Saudi Arabia talks up the market, the potential for a significant drop in prices are high.

"The Saudis benefit from talking this market up ... they buy a little time and give the market a chance to acquire better balance," said Jim Ritterbusch, president of Chicago-based energy advisory Ritterbusch & Associates.

"If at the end of the day the Saudis don't go along with an agreement to cut production, the market will go right down, just like last time."

U.S. refined products futures, including gasoline RBc1 and diesel HOc1 , jumped after Motiva Enterprises LLC's MOTIV.UL 235,000 barrel per day Convent, Louisiana, refinery was evacuated due to a fire at a hydrocracker around midday on Thursday. sulfur diesel futures soared 5 percent to a session high of $1.3934 a gallon, their highest since July 21 after the news.

Diesel crack spreads 1HOc1-Clc1 , a key measure of margins for refiners, jumped as much as 7.7 percent to a high of $14.72 during the session.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.