Crude oil rally drags into October as sentiment about the energy market shifts with the latest intervention from the Organization of Petroleum Exporting Countries. File photo by Monika Graff/UPI |
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NEW YORK, Oct. 3 (UPI) -- Market sentiment prevailed over analyst pessimism to carry a rally sparked by the latest maneuvering from OPEC into the first trading day for October.
Crude oil prices are up more than 8 percent from one week ago, lifted in part by declining inventory levels and efforts to keep production levels static. The price for Brent crude oil was up 0.2 percent to start the day at $50.29 per barrel, continuing on from Friday's rally. West Texas Intermediate, the U.S. benchmark price for oil, gained 0.3 percent to start the trading day in New York at $48.39 per barrel.
Short-term support for a rally emerged Sunday when British energy company BP confirmed a release at a platform servicing one of the largest oil fields in the North Sea. There was no estimate of spill volume as of early Monday, though operations while sidelined with the investigation into the incident continues.
Other markets turned lower Monday amid jitters over the fate of Germany's troubled Deutsche Bank and the European trajectory without the British economy. The British government offered assurances Monday to some sectors of its economy that depend on European funds by saying they'd be supported as the British exit from the European Union unfolds.
Oil started its rally last week after members of the Organization of Petroleum Exporting Countries agreed to work toward a deal that would put a cap on production levels from its members. A research note from brokerage PVM said there are few actual guarantees in the deal that would narrow the gap between supply and demand.
"The conclusion of last week's tentative agreement is that the verbal willingness is there within OPEC to cut production and support prices but it might be lacking the ability or real desire to achieve its target," it said.
Nevertheless, a willingness by members of OPEC to favor action on price over concerns over market share means the organization remains highly influential over movements in the oil economy.
Crude oil prices moving into the fourth quarter tend to drift lower, though the extent of any decline may be muted ahead of OPEC's next meeting in November.
