Oil prices edged up in Asia on Monday as OPEC member Venezuela indicated a deal to limit output is close while fighting in Libya stopped it kickstarting exports, but gains were limited by ongoing worries about a supply glut.
Key crude states are due to meet in Algeria next week to discuss the global supply crisis and overproduction that has hammered prices for two years.
Venezuela President Nicholas Maduro on Sunday said participants in the talks — the OPEC cartel and Russia — are now working on a deal and that he had discussed the issue with his Iranian and Ecuadoran counterparts.
Without revealing details, Maduro said he hoped to make a concrete announcement by the month’s end.
At about 0345 GMT, US benchmark West Texas Intermediate was up 79 cents at USD 43.82 and Brent rose 78 cents to USD 46.55. WTI sank 6.6 per cent last week and Brent fell 4.5 per cent.
Crude has been dogged by a stubborn supply glut since late 2014, with prices hitting near 13-year lows at the start of this year. A previous attempt at a deal in April fell apart when Iran, which had just emerged from years of Western nuclear-linked sanctions, refused to take part.
OANDA senior market analyst Jeffrey Halley said in a note: “Noises from OPEC about a possible deal on production cuts, clashes around a Libyan export terminal scheduled to make its first deliveries since 2104 combined to see both Brent and WTI bounce anaemically.”
Fighting erupted in Libya on Sunday as UN-backed unity government forces attempted to retake oil ports seized last week by a rival administration.
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The fighting led a Maltese-flagged tanker to turn back out to sea for safety, abandoning plans to load crude oil at Ras Lanuf, which would have been the port’s first export since 2014.
Libya has Africa’s largest oil but has exported only a few tankers of crude in recent months as a result of unrest.
Traders are also keeping an eye on a Federal Reserve policy meeting this week hoping for fresh clues about the state of the world’s top economy and some guidance on its plans for interest rates.