16 August 2016, Lagos – Oil prices rose Tuesday extending the previous session’s gains, as markets assess the likelihood of producers reaching a deal to limit output.
Around 1230 GMT, Brent North Sea crude for delivery in October was up 33 cents at $48.68 a barrel.
US benchmark West Texas Intermediate for September delivery gained 28 cents to $46.02 compared with Monday’s close.
Traders are speculating on whether Saudi Arabia and other major oil producing nations will reach an agreement at a meeting next month to tackle a supply glut.
Members of the Organization of Petroleum Exporting Countries (OPEC) as well as non-members are expected to meet informally in Algeria on the sidelines of the International Energy Forum from September 26 to 28. Saudi Arabia’s oil minister Khalid al-Falih has hinted that producers could discuss actions to stabilise prices.
His remarks last week sparked a price rally and the oil market gained further on Monday after Russian Energy Minister Alexander Novak said his country was working with Saudi Arabia to achieve oil market stability.
On Tuesday Novak said his ministry was making plans for a possible meeting with OPEC in October.
But Nigerian Petroleum Minister of State Emmanuel Kachikwu has voiced doubts that an agreement can be reached.
Angus Nicholson, a strategist at IG Markets, added Tuesday: “The chances of a deal actually occurring at next month’s OPEC meeting are minimal”, following previous failed attempts earlier this year.
Prior to the recent price rally, oil entered a “bear” market at the start of the month on oversupply concerns, falling more than 20 percent and closing below $40 a barrel for the first time since April.