Oil prices rose this morning to their highest in nearly a month, with benchmark Brent crude trading more than 10% above the start of August, as speculation intensified about potential producer action to support prices in an oversupplied market.
Reuters reports Brent crude oil futures rose to a monthly high of $47.67 a barrel this morning before dipping back to $45.66 as of 10 a.m. U.S. West Texas Intermediate crude futures rose to a high of $45.15 a barrel before dipping to $44.69 a barrel, still up 20 cents from their last close. WTI has gained more than 7% in August.
Russian Energy Minister Alexander Novak bolstered hopes this morning that oil producing nations could take action to stabilize prices, telling a Saudi newspaper that his country was consulting with Saudi Arabia and other producers to achieve market stability.
Still, analysts were skeptical that the market could maintain its strength, particularly as the excess of supply that has dogged producers for the past two years showed little sign of quickly abating.
“In our view a renewed price correction cannot be ruled out if market participants start focusing on the supply side again, for the latest drilling activity figures in the U.S. cast doubts that the oversupply is really being eroded,” Commerzbank analyst Carsten Fritsch says in a note.
Baker Hughes data released on Friday showed the number of rigs operating in the U.S. rose by 15 last week to 396. While far from the over 1,600 in operation in 2014 before the price rout, it has steadily risen from a low of just 316 in late May as U.S. producers adjusted to lower prices.
