Oil prices rose overnight, buoyed by comments by the head of OPEC that the organisation could take action to balance oil markets and that it will decide in December on supply for next year.
Mohammad Barkindo, secretary-general of the Organisation of the Petroleum Exporting Countries, did not specify if the move would mean extending a pact to rein in production to stabilise prices but the comments appeared to nudge the market out of pessimism over US-China trade talks.
Global benchmark Brent crude futures rose 56 US cents, or 1.0 per cent, to $US58.88 a barrel.
US West Texas Intermediate (WTI) futures were up 78 US cents, or 1.5 per cent, at $US53.37.
A December meeting between OPEC plus allies including Russia would take “decisions that will set us on the path of heightened and sustained stability for 2020,” Barkindo said on Thursday.
“Barkindo’s comment reminds markets that if oil prices do not fall off a cliff over demand concerns, we could very see OPEC+ extend their production cuts throughout the majority of 2020,” said Edward Moya, senior market analyst at OANDA in New York.
Separately, Saudi Arabia told OPEC its monthly oil output fell by 660,000 bpd in September after major attacks on its energy facilities, while OPEC lowered its 2020 forecast for non-OPEC supply growth.
Those signals from OPEC suggested a tighter global oil supply picture, but elsewhere abundance reigned.
Price gains were curbed by a report of rising stockpiles in the United States, currently the world’s biggest oil producer.
US crude stocks rose by 2.9 million barrels in the week to October 4, the Energy Information Administration (EIA) said on Wednesday, more than double analyst expectations.
Additionally, OPEC member Nigeria secured a higher production target from the organisation and a force majeure over exports from the key Bonny Light stream was lifted.
Venezuela will also increase its exports despite US economic sanctions that have curtailed shipments as Indian refiner Reliance Industries plans to start loading Venezuelan crude after a four-month pause.
Uncertainty over US-China trade talks resuming on Thursday had previously weighed heavily on the market.
Still, there has not been a sustained rally or fall in prices in recent months, though both oil benchmarks are down more than 20 per cent from April peaks.
“The oil market is neither bullish nor bearish. It is not trending. It has no reason or excuse to trend,” said Tamas Varga of oil brokerage PVM.
“It would be stretching it to say that the market is paralysed, but it is in a stalemate. No one is willing to commit to either direction.”