Oil Climbs as Saudis Say Talks May Include Market Stabilization

• Saudis say producers may discuss possible action: Reuters
• Record demand from refiners to erode bloated stockpiles: IEA

Oil is heading for its biggest weekly advance since April amid speculation informal OPEC talks next month may lead to stabilization measures after prices tumbled into a bear market.

Futures climbed as much as 0.6 percent in New York after surging 4.3 percent Thursday. Discussions with members of the Organization of Petroleum Exporting Countries and non-OPEC producers may include possible action to stabilize the market, Saudi Arabia’s Energy Minister Khalid Al-Falih said in a statement, according to media reports, including Reuters. Global markets will continue to rebalance this year, according to the International Energy Agency.“The Saudi comments gave the market some life,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “The talk is all about pushing the price higher and the market will speculate on whether they can actually pull a deal together. Calls from the IEA that the glut will start to shrink and consumption will pick up are also supportive.”
Oil has fluctuated after falling more than 20 percent into a bear market and closing below $40 a barrel last week for the first time in almost four months. Refiners around the world will process record volumes of crude this quarter as their intake rebounds, shrinking brimming crude supplies, the IEA said in its monthly report on Thursday.
West Texas Intermediate for September delivery rose as much as 28 cents to $43.77 a barrel on the New York Mercantile Exchange and was at $43.70 at 8:50 a.m. Hong Kong time. The contract gained $1.78 to $43.49 on Thursday, rebounding after a 3.1 percent drop during the previous two sessions. Total volume traded was about 23 percent below the 100-day average. Prices are up 4.5 percent this week.
Brent for October settlement increased as much as 20 cents, or 0.4 percent, to $46.24 a barrel. Prices rose $1.99, or 4.5 percent, to $46.04 a barrel on Thursday. The global benchmark crude traded at a premium of $1.74 to WTI for October.