NEW YORK: Oil prices jumped on Monday (Sep 26), boosted by hopes that major oil producers will agree at an Algeria gathering this week to limit output.
US benchmark West Texas Intermediate for November delivery rose US$1.45 to US$45.93 a barrel on the New York Mercantile Exchange. Brent North Sea oil for November delivery gained US$1.46 to US$47.35 a barrel in London.
Monday's advance made up for most of the decline from Friday, when doubts about the Algeria talks pushed oil prices down.
Members of the Organisation of the Petroleum Exporting Countries are meeting this week with key non-OPEC producer Russia on the sidelines of the International Energy Forum in Algiers.
"Mostly this is just going up and down on the speculation of what is going to happen in the next three days at the meeting in Algeria," said James Williams at WTRF Economics. "And frankly we do not know."
Andy Lipow of Houston consultancy Lipow Oil Associates said the boost was partly due to news stories suggesting OPEC heavyweight Saudi Arabia was somewhat more open to an agreement than previously believed.
Algerian energy minister Noureddine Boutarfa also spoke hopefully of the prospects for agreement. OPEC "agrees on the need to stabilise prices, it just remains for us to find a format that pleases everyone", Boutarfa said on Sunday.
However, analysts warned that there are still key barriers.
"While several OPEC members have made positive noises in the lead up to talks, there are still questions over how effective any informal agreement might be," said analyst Bill Hodder at British-based consultancy Love Energy.
"Iran has still not responded to Saudi Arabia's offer to mutually freeze production, possibly indicating that it may be difficult for them to agree a deal on Wednesday."