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Crude oil prices gained on Monday morning as optimism prevailed that production cuts would come in response to the oversupplied market.
UAE Energy Minister Suhail bin Mohammed al-Mazrouei said OPEC was willing to talk about cutting output with other exporters.
Light, sweet crude future for March delivery were up 39 cents, or 1.4 percent, on the New York Mercantile Exchange, reaching $29.83 per barrel on Monday morning.
Brent crude for April delivery was up 31 cents, or 0.9Q percent, on London’s ICE Futures exchange, reaching $33.67 per barrel after falling below $30 on Thursday.
Related: UAE Offers India Free Oil To Ease Storage Woes
Those gains were also prompted in part by a state from oil services giant Baker Hughes, which said that U.S. energy firms had cut the number of oil rigs for the eighth consecutive week, reaching their lowest levels since January 2010.
The is all about trading on sentiments, and the rally comes after the United Arab Emirates (UAE) announced that the leaders of OPEC countries were ready to cooperate on production cuts.
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This exact sentiment has been swinging the market on a daily basis for months. While optimism prevailed after UAE’s announcement, skeptics note that Venezuela and Russia have failed in attempts to convince Saudi Arabia and other OPEC majors to agree to production cuts.
The overriding sentiment is that prices will have to rebound eventually in order to rebalance supply and demand.
At the end of the day, these investors who remain convinced that we a recovery is just around the corner are pushing long bets up to their highest point in eight months.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com