Crude oil futures advanced by more than 1.5 per cent in the domestic market on Monday, consolidating its biggest rally in seven years internationally, as speculation continued to grow that large oil producers may agree on coordinated output cuts to help rebalance an oversupplied market.
UAE Energy Minister late last week had hinted at the possibility of cooperation between OPEC nations on potential production cuts to tackle a growing supply glut.
Iran, meanwhile loaded its first cargo to Europe since international sanctions against the Islamic nation ended earlier this year, raising the risks of increased Iranian crude flooding the markets.
Traders shrugged off weak trade data from China as the country’s exports fell by 11.2 per cent, in US dollar terms, in January 2016, from the same month a year ago while crude imports slid 20 per cent to the lowest level in three months at 6.3 million barrels per day in January from the prior month amidst a slowdown in operations at state refineries and ballooning stockpiles of the fuel.
Oil may extend a rebound today as the likelihood of a meeting between Saudi Arabia and Russia fueled talk of a potential output cut.
At the MCX, Crude oil futures, for the February 2016 contract, closed at Rs 2,037 per barrel, up by 1.55 per cent, after opening at 2,001, against the previous close price of Rs 2,006. It touched an intraday high of Rs 2,057.