Oil futures jumped on Monday as OPEC announced it will meet at the 15th International Energy Forum in Algeria next month in order to discuss how to bring stability to the volatile crude oil market, according to Bloomberg MarketWatch.
September West Texas Intermediate crude rose $1.22, or 2.9%, to settle at $43.02 a barrel on the New York Mercantile Exchange.
On London’s ICE Futures Exchange, October Brent crude, the global benchmark, climbed $1.12, or 2.5%, to settle at $45.39 a barrel. Both grades of crude settled at their highest levels in roughly two weeks.
“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” said Richard Hastings, macro strategist at Seaport Global Securities.
“This very formal announcement of an ‘informal meeting’ signals to the market that OPEC members could reach an agreement,” said Jason Schenker, president of Prestige Economics.
Futures have shifted during the past couple of weeks including a return to the bear market when oil settled around the $40 a barrel mark causing concern among OPEC cartel members.
“As was the case earlier this year, many OPEC members are likely to be in favor of the freeze, but any meaningful action would require coordination from members with more significant upside to current production (principally Iran and Libya),” said Robbie Fraser, commodity analyst at Schneider Electric.
“If the last round of talks is any indication, this latest revival is likely to be high on speculation and relatively weak on substance,” he said in a note. “Nonetheless, there remains significant risk to the upside through certain OPEC members. Nigeria, Venezuela, Iraq, and Libya all face notable production risks and could be subject to additional unplanned outages going forward.”
“It’s obvious that OPEC members want a higher oil price, and we still believe the $50 to $60 dollar range will suit all parties,” said Nico Pantelis, head of research at Secular Investor. “We expect higher prices for oil in the coming weeks, with our first targets between $46 and $48.”
Meanwhile, September natural gas futures fell 2.4 cents, or 0.9%, to settle at $2.748 per million British thermal units on the New York Mercantile Exchange.