Brent crude futures rose as much as 3 percent on Monday, adding to strong gains last week, on rising hopes that the market has bottomed out and as OPEC kingpin Saudi Arabia said it would work with other producers to limit oil market volatility.
Brent futures were trading at $36.15 per barrel at 11:26 a.m. ET (1626 GMT), up $1.05, or 3 percent. U.S. crude futures traded 98 cents, or 2.7 percent, higher at $33.67 a barrel
Since Feb. 11, the last time Brent was below $30, the crude benchmark has risen by 17 percent, though prices are still a fraction of the $115 of 20 months ago.
“The kingdom (of Saudi Arabia) seeks to achieve stability in the oil markets and will always remain in contact with all main producers in an attempt to limit volatility and it welcomes any cooperative action,” the Saudi cabinet said in a statement.
Saudi Arabia and several fellow OPEC members agreed with non-OPEC Russia this month to freeze output at January levels in an attempt to prop up prices.
Russian President Vladimir Putin called a meeting with top managers of his country’s leading oil producers on Tuesday.
However, Iran remains the main obstacle to a global output freeze because it is determined to ramp up supply after the country’s emergence from international economic sanctions in January.
On Monday Iran said it had increased exports steeply over the past month. Exports climbed as high as 1.75 million barrels per day, adding to an already oversupplied market.
“There is still a lot of downside risk … but the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels,” said Richard Gorry, director of JBC Energy Asia.
U.S. producers cut the number of rigs drilling for oil for a tenth week running, taking the rig count to its lowest since December 2009.
A Reuters monthly poll showed on Monday that oil prices are expected to average a little more than $40 a barrel this year.
Copyright: CNBC
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