Oil Extends Gains Above $44 On Output Freeze Hopes
SINGAPORE, (APP - UrduPoint / Pakistan Point News - 15th Augst,2016) - Oil traded above $44 a barrel in Asia Monday, extending gains on hopes crude producers would agree to freeze output at a meeting next month, easing a stubborn global supply glut. Saudi Arabian oil minister Khalid al-Falih's comments last week that producers could discuss action to stabilise markets lifted market sentiment, helping prices rebound since closing below $40 a barrel and tumbling into a bear market earlier this month. Any agreement to put curbs on production would help rebalance the crude oil market, where output has been running ahead of demand, analysts said. At around 0320 GMT, US benchmark West Texas Intermediate for delivery in September was up 37 cents, or 0.
83 percent, at $44.86 a barrel and Brent crude for October gained 35 cents, or 0.75 percent, to $47.32. Both contracts rose more than six percent last week following the Saudi minister's remarks. "Oil is now close to an equilibrium price, and unless we get further developments, I would expect to see it trading around the $44 to $45 level for the balance of the week," Michael McCarthy, a chief market strategist in Sydney at CMC Markets, told Bloomberg news. "It wouldn't surprise me to see a little bit of pressure as some investors lock in some of the gains they've made." Some analysts, however, have cautioned against putting too much hope on an output freeze, noting that previous talks earlier this year have resulted in disagreement.