AFP - Oil extended a recent rally in Asia yesterday, boosted by weakness in the dollar and Russia saying it could meet the OPEC producers’ group for talks on possible output cuts to ease a painful supply glut.
But analysts cautioned against putting too much hope on such talks, noting that similar discussions in the past had failed to end with concrete results.
By 0700 GMT, US benchmark West Texas Intermediate was up 63 cents, or 1.90 percent, at $33.85 and Brent for March gained 79 cents, or 2.33 percent, to $34.68.
Prices have crashed by about three quarters since mid-2014 owing to weak demand, overproduction, the supply glut and a global economic slowdown, particularly in key user China.
But both contracts surged on Thursday after Russian reports that Energy Minister Alexander Novak had said Moscow was ready to take part in talks with OPEC to establish possible “coordination”.
He said the discussions could be on making production cuts of up to five percent per country.
However, the gains were later pared and Phillip Futures analyst Daniel Ang said the rise has been driven more by a fall in the dollar after US data showed a steep 5.1 percent fall in new orders for manufactured goods in December.