Global oil prices rose to a three-week high over the weekend, up as much as 25% from the 12-year lows hit last week. Additionally, there has been speculation about a deal between the major oil exporters to slash production.

The oil market rallied for four straight sessions after a renewed call from OPEC for joint efforts with rival producers to cut supply triggered comments from Russia on a deal with the cartel, something it had been refusing to do for 15 years.

Russian Foreign Minister Sergey Lavrov will be visiting the Opec-member UAE and non-member Oman this week (February 2-3), raising the possibility of a production agreement between major oil exporters.

Brent crude oil settled at $35.99 a barrel, up almost 30% from the 12-year low it hit last week. West Texas Intermediate (WTI), on the other hand, settled at $33.62 a barrel over the weekend, having hit a high of $34.40 during the last session of January.

Venezuela also sent its oil minister to Russia on a tour beginning on Saturday of non-Opec and fellow Opec states.

Critics of the speculation regarding a deal maintain that with Iran and Iraq staying out of any potential negotiations, it may be a false hope fuelling the current oil prices.

There are further reports that Iran and Iraq are determined to boost production, and are unlikely to come together with Saudi Arabia to cut OPEC output.

“This is a rally on false hopes, unfortunately," says John Kilduff, partner at Again Capital in New York.

Other analysts say prices may have hit bottom and could rally as high as $45 by year-end as non-Opec supply is reduced and global demand improves.

“With more energy companies announcing cuts and Opec contemplating a cut, it looks like oil is forming a bottom,” said Phil Flynn, an analyst at Price Futures Group in Chicago.

“Now the question becomes how high can they go. The charts look like a test near $40 is on the cards.”

We can only hope and pray here in south Louisiana that things rebound at least to some degree.


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