WTI crude oil gains as Russia-Saudi deal continues to generate buzz
But Brent loses ground early Tuesday
The U.S. oil benchmark moved higher Tuesday, with analysts continuing to give credit for the advance to a pact between the world’s two largest crude producers, Russia and Saudi Arabia.
October West Texas Intermediate crude CLV6, -0.86% rose by 43 cents, or 1%, to $44.88 a barrel. November Brent crude LCOX6, -2.27% wasn’t joining WTI in marching higher, instead dropping by 38 cents, or 0.8%, to $47.24 a barrel.
Russian and Saudi officials on Monday said they will set up a working group to monitor the oil market and come up with recommendations to promote stability. The announcement gave a lift to crude prices on Monday, though those gains faded by Monday afternoon as the news underwhelmed traders who had been hoping for a production freeze.
Although the cooperation might mark a new era, it still does not change the current oversupply woes, said Lukman Otunuga, an FXTM analyst, in a note on Tuesday.
“While the short-term gains from freeze deal speculations have been impressive, the commodity remains pressured with further losses expected if September’s informal OPEC meeting concludes without an effective deal,” Otunuga added.
The meeting of the Organization of the Petroleum Exporting Countries is expected to take place in Algeria later this month.
Traders on Tuesday had an eye out for headlines from a meeting between OPEC Secretary-General Mohammed Barkendo and Iran’s oil minister. The confab had started in Tehran, a Reuters report said.
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