NEW YORK – Oil prices climbed on Thursday (Sep 22), building on the previous day’s gains, as traders looked ahead to a key meeting of major oil producers next week in Algeria.
US benchmark West Texas Intermediate for November delivery gained 98 cents to US$46.32 a barrel on the New York Mercantile Exchange. In London, Brent oil for delivery in November, added 82 cents at US$47.65 a barrel in London.
It was the second straight day of solid gains after the US Department of Energy reported on Wednesday that US commercial inventories of crude oil tumbled more than six million barrels last week.
OPEC and non-OPEC members are planning talks in Algiers next week on how to reverse the supply glut that sent oil prices to near 13 year lows at the start of 2016.
Analysts were giving those talks a better chance following news that oil giants Saudi Arabia, Iran and Qatar met at OPEC headquarters in Vienna.
“If sometime before Wednesday we hear that OPEC has scheduled a formal extraordinary OPEC meeting at the end of the conference, it will signal they have reached an agreement to put a lid on production increases,” said James Williams of WTRG Economics.
Previous efforts in April for a production cap fell apart after OPEC member Iran – which had just come out from years of Western nuclear-linked sanctions – refused to take part.
Analysts also pointed to a boost from Wednesday’s Federal Reserve meeting at which the US central bank kept interest rates low. That decision pushed the dollar lower against most currencies, boosting demand for oil, which is traded internationally in the US currency.
“The weaker dollar is definitely helping commodities across the board,” said Oliver Sloup of iiTrader.com.