Ejiofor Alike with agency reports
Crude oil prices recovered yesterday from six-week lows, following comments by the Secretary General of the Organisation of Petroleum Countries (OPEC), Mr. Mohammed Barkindo, that a planned agreement on possible cut in production could last up to one year.
As the oil market weighed up Barkindo’s comments, the US West Texas Intermediate crude futures rose one per cent, to $43.75 per barrel, after touching $42.55, the lowest in nearly six weeks.
The global benchmark, Brent also rose from $45.09 per barrel, its lowest since August 11, to close at $45.85 per barrel.
Oil prices initially fell yesterday on pessimism that OPCE and other major crude producers will reach an output freeze deal at September 26-28 informal talks in Algeria.
Saudi Arabia, Iran, Iraq, Nigeria and Libya, five of OPEC’s largest oil exporters, have all raised or been trying to hike output in recent months even while talking of a production cut.
But Reuters reported that as noon approached, fresh buying emerged from those fearing of a rally should OPEC announce a deal in Algeria.
Barkindo‘s comments that he expected a potential freeze deal between OPEC and other producers to freeze output to last one year, longer than previously thought, helped in the slight recovery.
The prices had appreciated on Monday after Venezuela hinted that OPEC and other major oil producers could agree to output cuts.
Venezuelan President Nicolas Maduro had said last Sunday that OPEC and other major oil producers were close to reaching a deal on price stability that could be announced later this month.
OPEC and non-OPEC members are to meet on the sidelines of an industry conference in Algeria next week for talks on the potentially freezing oil production.
OPEC members may call an extraordinary meeting to discuss oil prices if they reach consensus, OPEC Secretary-General Mohammed Barkindo said on Sunday.
OPEC’s all-important policy meeting is due in November.
There are concerns that OPEC members such as Saudi Arabia, Iran, Nigeria and Libya would agree to production curbs as they ramped up output to protect market share.