As Oil Jumps to One-Month High as OPEC Ready to Talk to Producers

31-Aug-2015

Oil rose to a one-month high after OPEC said it’s ready to talk to other global producers to achieve ‘fair prices’ and the U.S. government reduced its crude output estimates.

The Organization of Petroleum Exporting Countries, responsible for about 40 percent of the world’s supply, is willing to talk, “but this has to be on a level playing field,” according to the OPEC Bulletin, the group’s monthly publication. The Energy Information Administration trimmed its U.S. production forecast by as much as 130,000 barrels a day for the first five months of the year as it switches to a new survey, the agency said on its website.

Futures dropped to a six-year low this month amid concern that slowing demand in the U.S. and China will leave the global market oversupplied. A measure of oil-price fluctuations rose to a five-month high.

“The market turned around on two pieces of news,” Phil Flynn, senior market analyst for Price Futures Group Inc. in Chicago, said by phone. "The EIA cut its U.S. output estimates and OPEC says its ready to talk to others about cutting output."

West Texas Intermediate for October delivery surged $2.75, or 6.1 percent, to $47.97 a barrel at 1:10 p.m. on the New York Mercantile Exchange. Futures reached $48.25, the highest since July 31. Prices slipped as much as $1.62 to $43.60 earlier. The contract is up 24 percent in three sessions since Aug. 26. Volume was 69 percent above the 100-day average. (by Mark Shenk, Bloomberg)