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Brent for October settlement reached a three-week high, trading
up $1.30, or 1.3%, at $101.52 a barrel by 0850 GMT. U.S. crude
was up $1.18, or 1.3%, at $94.92 a barrel.
Contracts for both crudes soared on Tuesday after Energy
Minister Prince Abdulaziz bin Salman flagged the possibility of
cutting production amid poor futures market liquidity and
macro-economic fears.
OPEC sources later told Reuters any cuts by the Organization of
the Petroleum Exporting Countries and its allies, known as
OPEC+, were likely to coincide with a return of Iranian the
market should Tehran secure a nuclear deal with world powers.
A U.S. official said on Monday that Iran had dropped some of its
main demands on resurrecting a deal.
OPEC+ is already producing 2.9 million barrels per day less than
its target, sources said, complicating any decision on cuts or
how to calculate the baseline for an output reduction.
"The oil price and supply outlook suggest that an OPEC+ cut is
not currently warranted," PVM analyst Stephen Brennock said,
outlining possible threats to supply underpinning the market.
"Global oil supply could take a hit as peak U.S. hurricane
season approaches," he said. "Elsewhere, future supply outages
in Libya cannot be discounted while Nigeria's oil fortunes show
little sign of improving."
U.S. crude stockpiles fell by about 5.6 million barrels for the
week ended Aug. 19, according to market sources citing American
Petroleum Institute figures. Analysts had estimated a drop by
900,000 barrels in a Reuters poll. [API/S]
U.S. government figures are due out on Wednesday. [EIA/S]
Market participants will be watching Federal Reserve Chair
Jerome Powell's speech at the Jackson Hole central bank
symposium on Friday. He is expected to stress the Fed's focus on
controlling inflation.
(Additional reporting by Mohi Narayan in New Delhi and Yuka
Obayashi in Tokyo)
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