Optimism pervades as Opec prepares to meet in Algiers
A wave of optimism swept through global oil markets this morning as the world's biggest producers prepare to meet on the sidelines of an international conference in Algeria later this week.
Positive comments made by the country's energy minister helped send Brent crude, the global benchmark, up as much as 1.15 per cent to $46.42 per barrel.
Its US counterpart, West Texas Intermediate (WTI) also rose as much as 1.06 per cent to $44.95 per barrel.
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Noureddine Bouterfa confirmed over the weekend that there would be an informal gathering of Organisation of Petroleum Exporting Countries (Opec) members on the sidelines of an energy conference in Algiers on Wednesday. "We will not come out of the meeting empty-handed," he added.
The black stuff tumbled four per cent on Friday, amid signs that rivals Saudi Arabia and Iran were struggling to achieve a preliminary agreement to freeze output. Tension between the two powers scuppered a previous attempt to strike a freeze deal earlier this year.
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While analysts are sceptical that the meeting will result in an agreement to hold production, they believe members will suggest that co-ordinated action to stabilise the world's oversupplied crude markets is still on the table.
"Participants in the producer meeting are not going to want a repeat of Doha. Some factors have changed and make a 'freeze' more palatable, but still unlikely," analysts at Barclays wrote in a note.
"Our base case assumption is no freeze; yet, members are likely to make statements highlighting that they are closely watching market developments and will host a subsequent exceptional meeting if deemed necessary."