Nymex October West Texas Intermediate rose 68 cents to $68.70 a barrel, recovering from last week’s fall when crude prices dropped 6.5 per cent.
ICE October Brent added $1.04 at $67.86 a barrel.
Opec ministers meet in in Vienna this week to decide on production quotas for the oil producers group. Analysts said they expected further calls for better compliance with existing quotas but no change in the cartel’s overall output.
“We expect another Opec quota rollover to be the result of the meeting,” said Mike Wittner, global head of oil research at Societe Generale:
“Opec is happy with (current) crude prices. Around the time of the last meeting in May, prices were in the high $50s, and Opec said that their target was $75, or a range of $70-80. They have achieved that, and must be pleased, considering the economic backdrop.”
SocGen also noted that crude oil inventories were still high, sufficient for around 61.7 days of demand and above their historic average.
Mr Wittner said that it would not be in Opec’s own interest to cut production quotas because of the stock overhang as this could derail global economic recovery and damage prospects for oil demand growth.
Traders have also noted that several Opec members, Angola, Iran, and Venezuela, have continued to produce more oil than their agreed quotas and have protested against what they viewed as unfair restrictions. Any new agreement could increase tensions between Opec’s members and potentially damage the cartel’s unity.
Read the full commodities report.