Investing.com -- U.S. crude futures soared to fresh 3-week highs after Russia energy minister Alexander Novak hinted that his nation could be open to holding discussions with major producers from the Middle East in the coming weeks, as OPEC considers whether it will be prudent to freeze output in an effort to stabilize persistently low oil prices.
On the New York Mercantile Exchange, WTI crude for September delivery traded between $44.38 and $45.77 a barrel before closing at $45.72, up 1.23 or 2.76% on the session. The front month contract for U.S. crude closed higher for the fourth straight session and the fifth time in the last seven trading days. With the sharp gains, WTI crude eclipsed $45 a barrel for the first time since July 20. On the Intercontinental Exchange (ICE), brent crude for October delivery wavered between $46.84 and $48.39 a barrel, before settling at $48.33, up 1.36 or 2.90% on the day. Brent futures cleared $48 for the first time since July 15.
Both the U.S. and international benchmarks of crude are coming off their strongest week since the spring, soaring approximately 5% last week.
Crude futures extended last week's rally on Monday after reports surfaced that Russia could consider meeting with top producers from OPEC in a potential attempt to coordinate joint oil market stabilization. The comments come days after Saudi energy minister Khalid al-Falih sparked a rally last week by suggesting that OPEC producers could meet on the sidelines of next month's International Energy Forum (IEF) in Algeria, their first informal meeting since the 14-member cartel left its production ceiling unchanged at a closely-watched meeting in June. Weeks earlier, a coordinated production freeze between Saudi Arabia, Russia and two other major producers collapsed after the Saudi kingdom insisted that main rival Iran take part in any agreement that required the participants to cap output at levels from early-2016.
"With regard to the cooperation with Saudi Arabia, the dialogue between our two countries is developing in a tangible way, whether in the framework of a multi-party structure or on a bilateral level," Novak told Saudi state-owned newspaper Asharq al-Awsat. "We are cooperating in the framework of consultations regarding the oil market with OPEC countries and producers from outside the organization, and are determined to continue dialogue to achieve market stability."
Saudi Arabia, the world's top oil exporter, could be willing to freeze output at its current levels given that the kingdom pumped 10.67 million barrels per day of oil last month, its highest amount on record. Iran, which boosted production to 3.65 million bpd in July, has plans to increase output over the next five years until it reaches a target of 4.6 million bpd, according to comments made by energy minister Bijan Zanganeh before the Islamic Consultative Assembly, also known as the Iranian Parliament. The comments were reported by Iran's FARS News Agency.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell by more than 0.15% to an intraday low of 95.43. Since hitting a four-month high at 97.62 in late-July, the Dollar has retreated by approximately 2%.
Dollar-denominated commodities such as Crude become more expensive for foreign purchasers when the dollar appreciates.