By Alison Sider,Kevin Baxter and Jenny W. Hsu
Oil prices were up Monday as the market recovered some of last week's losses on renewed hope that the world's major oil producers will come to an agreement regarding production cuts.
U.S. crude futures rose 64 cents, or 1.45%, to $44.71 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 52 cents, or 1.14%, to $46.10 a barrel.
The Organization of the Petroleum Exporting Countries reaffirmed its commitment to cutting output. OPEC Secretary-General Mohammed Barkindo said Monday that the cartel remains committed to the tentative accord the group reached in Algiers in September, and that Russia remainson board with the plan to limit output.
The statements helped bolster oil markets following reports of disagreements between OPEC members that stoked fears that the continuing talks about production cuts won't lead to a deal at the group's meeting in Vienna on Nov. 30. Both crude benchmarks lost about 10% last week on growing skepticism about a deal and a record 14.4-million-barrel rise in U.S. oil stocks.
"Now the whispers sound like there is going to be a deal," said Chip Hodge, senior managing director at John Hancock Financial Services. "There's a lot of talk, and until we actually see an agreement, speculation moves things up or down."
Some analysts also said oil was also benefiting from increased appetite for risky assets amid increased confidence that Hillary Clinton could prevail over Donald Trump in Tuesday's presidential election. The FBI said Sunday that it had not found new evidence to warrant charges against Mrs.Clinton related to her email practices while secretary of state.
Equity markets have also rallied as investors interpreted the announcement as favorable to Mrs. Clinton's chances and removing a key element of uncertainty.
A "Clinton victory on Tuesday could help risk assets such as oil rebound sharply," said Gordon Kwan, head of oil and gas research at Nomura.
Some analysts believe Mrs. Clinton, who has shown support for clean energy, may remove billions of dollars' worth of subsidies for oil and gas companies, making it less lucrative for them to keep pumping. The move could eliminate some of the overhang that has kept oil prices suppressed for more than two years
Tuesday will also see the release of the U.S. Energy Information Administration's November Short Term Energy Outlook. Bjarne Schieldrop, an analyst at Sweden's SEB bank, said in a note that market observers will be eager to find out the EIA's forecast for U.S.oil production in 2017.
Mr. Schieldrop is convinced that the 8.6 million barrels a day forecast from the October report will be raised again, by as much as 200,000 barrels a day. A bearish forecast could provide a headwind for prices as well as heap even more pressure on the Organization of the Petroleum Exporting Countries. He added that OPEC production cuts would raise prices in 2017, but also run the risk of re-energizing the U.S. shale sector, which could once again lead to an oversupplied market in 2018.
The Colonial Pipeline, a major fuel conduit to the East Coast, restarted Sunday, less than a week after a fatal explosion and fire. Many analysts had initially expected the outage to last longer and gasoline futures surged following the incident, but reversed those gains throughout last week. Gasoline futures were down 0.27 cents, or 0.2% to $1.3776 a gallon. Diesel futures rose 1.39 cents, or 0.97%, to $1.4442 a gallon.
--Summer Said and Ahmed Al Omran contributed to this article
Write to Kevin Baxter at Kevin.Baxter@wsj.com and Jenny W. Hsu at firstname.lastname@example.org
(END) Dow Jones Newswires
November 07, 2016 10:37 ET (15:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.