Oil traded near $31 a barrel after Saudi Arabia and Venezuela met to discuss cooperating to stabilize the market and U.S. data signaled investors are split on the direction for prices.
Futures rose as much as 0.9 percent in New York, trimming last week’s 8.1 percent drop. Saudi Arabian Oil Minister Ali al- Naimi met with his Venezuelan counterpart on Sunday in Riyadh, the Middle East nation’s petroleum ministry said in a statement, without elaborating on steps required to shore up the market. Speculators’ short positions on crude were near a record while longs were at the highest since June, lifting total wagers to unprecedented levels, data from the U.S. Commodity Futures Trading Commission show.
“There are very little signs of abatement on the supply side,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “West Texas is likely to trade between $30 and $34. We could get a push outside of this, but I suspect that’s going to be a central range for months to come.”
Oil is still down about 16 percent this year amid concerns about Iran’s effort to boost exports after the removal of sanctions and brimming U.S. crude stockpiles. The nation’s drillers idled the most rigs since April last week as inventories rose above 500 million barrels to the highest level since 1930.
West Texas Intermediate for March delivery gained as much as 29 cents to $31.18 a barrel on the New York Mercantile Exchange and was at $31.15 at 1:09 p.m. Hong Kong time. The contract fell 83 cents to $30.89 on Friday. Total volume traded was about 12 percent above the 100-day average. Prices lost 30 percent last year.
Brent for April settlement was at $34.32 a barrel on the London-based ICE Futures Europe exchange, up 26 cents. The contract slid 2 percent last week. The European benchmark crude was at a premium of $1.29 to WTI for April.
Venezuela’s Oil Minister Eulogio Del Pino met with al-Naimi after visiting Russia, Iran, Qatar and Oman on a tour to drum up support for a coordinated approach to address the slide in prices. Six members of the Organization of Petroleum Exporting Countries and two non-OPEC producers would be open to attending an extraordinary meeting if one is called, the South American country said last week.
U.S. stockpiles remain more than 130 million barrels above the five-year average after expanding for a fourth week through Jan. 29, according to data from the Energy Information Administration. Rigs targeting oil fell by 31 to 467, the lowest since March 2010, Baker Hughes said on its website Friday.
Money managers’ combined short and long positions in WTI, rose to 497,280 futures and options contracts in the week ended Feb. 2., according to the CFTC. Shorts increased by 9.7 percent to near the all-time high reached three weeks ago, while longs, or bets that prices will gain, climbed to the highest level since June, the data shows.