06 October 2015, News Wires – Oil prices rose on Tuesday, heading for the first three-day gain in five weeks, on signals that the world’s biggest producers of crude may act jointly to support prices, which have halved over the past year, Reuters reported.
The US benchmark, West Texas Intermediate crude, was up $0.54 at $46.80 a barrel. The contract gained 1.6% in the previous session, the news wire reported.
“The market is possibly moving on speculation that Opec and non-Opec countries will find an agreement to co-operate,” Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told Reuters.
Russia’s energy minister said Russia and Saudi Arabia had discussed the oil market in a meeting last week and would continue to consult each other.
This was in line with comments made by Opec Secretary-General Abdullah al-Badri at a conference in London that Opec and non-Opec members should work together to reduce the global supply glut, the news wire added.
“There is one problem we are facing: the overhang,” he said, adding there were already signs of higher crude demand and of a drop in supply growth from non-Opec members.
The former head of US shale producer EOG Resources said at the same conference that US oil production growth would tail off this month and start to decline early next year due to weak prices.
The US government echoed this assessment, saying in its monthly forecast that US crude output would fall through mid-2016. The government’s Energy Information Administration also raised its 2016 world oil demand growth forecast to 100,000 barrels a day to 1.41 million bdp.
Iran’s crude oil sales were on track to slip to the lowest in seven months as its main Asian customers were buying less than before.
The drop counters expectations that Iran’s exports would rise after Tehran and six world powers reached a nuclear agreement on 14 July, although sanctions are unlikely to be officially relaxed until next year.