Oil prices jump on rumors of Opec output freeze

AP File Photo

NEW YORK, United States — Oil prices continued to rise on Monday, with benchmark crude moving up more than a dollar per barrel in both New York and London.

A barrel of West Texas Intermediate for September delivery gained $1.22, rising to $43.02 on the New York Mercantile Exchange.

In London, a barrel of North Sea Brent for October delivery also rose $1.12 to $45.39 on the Intercontinental Exchange.

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Oil prices had a very bearish July, given recurring worries on the state of supply and inventories but have been rising for several trading days.

“The market continues to bounce,” said Gene McGillian of Tradition Energy. “We fell all the way to the $40 levels and the correction seemed to be a little extreme.”

“The market is refocusing on the expectations we’ll have a drop in North American production levels and the expected increase in global fuel demand,” said McGillian.

“Right now you see a covering rally,” he added, “and this triggers more buyers jumping in the market.”

According to Mike Lynch of Energy and Economic Research, oil markets may be reacting to rumors that the Organization of Petroleum Exporting Countries may freeze output levels.

“The rumors OPEC is considering a freeze are giving a little bit of impetus to the bulls,” he told AFP. “Not sure it will last very long but for now, that’s the only news that’s really up there.”