Oil rose for the first time in four day as the dollar weakened and OPEC warned that the prices might surge without any new investment in production.
Prices rose as much as 2.4%. The dollar dropped form the highest keel on record after the US durable goods orders decreased unexpectedly in December.
The oil minister of Saudi Arabia met with Norway and Russian officials to discuss the stability of the market, accordion to the Saudi Press Agency.
Bloomberg quoted Phil Flynn, senior market analyst at Price Futures Group as having said, “The dollar is definitely a factor that seems to be giving the market some support. The Saudis are going back to some non-OPEC producers. That may be a sign that they are willing to stabilize the prices.”
Tariq Zahir, managing member at Tyche Capital Advisors said, “It looks like crude is trying to stabilize out here in the mid $40 level, thanks to the weaker dollar. But I do feel that any rallies that we sees between now and tomorrow are going to be sold into. The EIA report that is going to come out on Wednesday is likely to show a very large build.”
According to Reuters the Benchmark Brent oil’s front-month contract rose 50 cents to $48.66 per barrel. The front month in the US crude rose 60 cents to $45.75.
OPEC Secretary General, Abdullah al-Badri said on Monday that the prices may have bottomed after the seven-month selloff, and warned of a possible spike to $200 per barrel.
However, energy market analysts at investment banks remain bearish on oil, with the Swiss Bank saying on Tuesday that it could take several years for these prices to recover.
In a note to its clients, the bank said, “We do not forecast oil prices to reach $90/$85 Brent/WTI until 2018.”
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