Investing.com -- U.S. crude futures rose considerably on Monday, closing a choppy month of February relatively flat, after Saudi Arabia promised to cooperate with other major producers over the weekend in renewed efforts to limit extreme volatility on global oil markets.
On the New York Mercantile Exchange, WTI crude for April delivery wavered between $32.34 and $33.92 a barrel before settling at $33.80, up 1.02 or 3.11% on the day. Since crashing to 13-year lows at $26.05 on February 11, U.S. crude futures rallied more than 21%, ending the month at its highest closing level in more than four weeks. For the month, WTI crude closed below 1% in a positive or negative direction from its closing level in the previous in just three of 21 sessions.
On the Intercontinental Exchange, brent crude for April delivery traded between $34.84 and $36.74 a barrel, before closing at $36.64, up 1.20 or 3.39% on the session. North Brent Sea futures have rallied by approximately 18% since briefly dropping below $30 a barrel in mid-February.
Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $2.84, above Friday's level of $2.32 at the close.
On Monday, crude prices extended gains from last week as investors reacted to bullish supply data and further indications that Saudi Arabia would work collaboratively with other major oil producers to help bring some stability to the struggling oil market. Separately, a survey from Reuters showed that OPEC supply declined slightly this month, providing a glimmer of hope that oil could be on the verge of halting a 20-month downturn where prices have tumbled more than 70% from June, 2014 highs of $115 a barrel.
In February, OPEC supply declined from 32.65 million barrels per day to 32.37 bpd, amid lower than expected production in Iraq, due to a pipeline malfunction that disrupted the flow of oil from a Kurdish region near the Turkey border to the Port of Ceyhan in the Mediterranean Sea. The declines were offset by production increases in Iran, whose exports rose as high as 1.75 miillion bpd. Saudi Arabian output, meanwhile, remained relatively steady near 10.2 million bpd.
"The kingdom (of Saudi Arabia) seeks to achieve stability in the oil markets and will always remain in contact with all main producers in an attempt to limit volatility and it welcomes any cooperative action," the Saudi Arabian cabinet said in a statement.
Saudi Arabia, Russia and two other OPEC members are expected to resume negotiations later next month on an accord that may result in the first deal between OPEC and Non-OPEC members in 15 years. If finalized, the two major producers could freeze their production at January levels below 11 million barrels per day.
Elsewhere, investors reacted to an unexpected easing measure by the People's Bank of China aimed at bolstering liquidity throughout the nation's financial markets. Earlier on Monday, the PBOC cut the Reserve Requirement Ratio or the amount banks must hold in reserve by 50 basis points, marking the fifth time it lowered the rate over the last year. The efforts could underpin demand for oil in China, the world's largest importer.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose to three-week high at 98.39, before falling slightly back to 98.23 in U.S. afternoon trading.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.