The price of oil stabilised today after two days of volatile trading, as the market digested the latest remarks from world crude producers about a possible pact to restrict output so as to give prices a boost.
A barrel of Brent North Sea crude for January delivery rose 15 cents in early deals to $18.90. Overnight, the December light sweet crude contract closed in New York at $19.15-a-barrel, up 72 cents.
Analysts said that after a week during which crude prices were marked down sharply, the market was now growing more sanguine about a possible deal between the Organisation of Petroleum Exporting Countries (OPEC) and its rivals on output cuts.
OPEC wants rival producers outside the 11-nation club to sign up to output cutbacks of their own before it will proceed with a promised cut of 1.5 million barrels per day.
Fears that non-OPEC would resist such a pact drove oil prices down sharply in recent sessions to a 29-month nadir of $16.65 a barrel in London on Monday.
But since then, big producers Mexico and Norway have promised cuts as long as Russia follows suit. Moscow had hitherto waxed reluctant about cutbacks, but has made more conciliatory noises in recent days.
"The market is clearly becoming optimistic that a non-OPEC deal can be reached, but there is also an element of positive sentiment filtering through from the stock markets about the world economy," said Lawrence Eagles, an oil expert with the GNI brokerage.
AFP