Oil sees a relief rally amid output deal hopes

Oil prices on both the sides of the Atlantic rallied as much as 2% on Monday, rebounding sharply from multi-week troughs struck in wake of bearish US rigs count data.

WTI near $ 45 mark

Currently, both crude benchmarks extend northwards, with Brent up +1.66% at $ 46.53, while WTI rises +1.74% to $ 44.39. Oil prices staged a solid comeback at the beginning of a brand new week, largely on the back of comments from the Venezuelan President Maduro, who said that the OPEC and non-OPEC producers may strike a deal at the Algerian meeting later this month, in a bid to stabilize oil markets.

Moreover, reports of loading disruptions in Libya stoked supply concerns and also lent support to the recovery in the black gold from five-week lows. As Reuters reports, “Clashes in Libya have halted the loading of the first oil cargo from the port of Ras Lanuf in close to two years, while also raising fears of a new conflict over Libya's oil resources.”

On Friday, oil fell sharply after Iranian crude exporters jumped 15% in August from the previous month, refueling supply glut concerns. While bearish US rigs count data, with drillers having added oil rigs for 11 out of the past 12 weeks, further accelerated the losses in oil. Moreover, a renewed rally in the US dollar across the board, following stronger US CPI figures also drowned the USD-sensitive oil.