Investing.com -- U.S. crude futures extended a substantial rally one day after posting its strongest session in six years, as the fallout continued from reports that Venezuela could be pushing OPEC to hold an emergency meeting to reverse crashing energy prices throughout the world.
On the New York Mercantile Exchange, WTI crude for October delivery traded in a broad range between $41.80 and $45.88 a barrel, before closing at $45.25 up 2.69 or 6.33% on the session. It came one day after Texas Long Sweet futures surged more than 10% to move off six-year lows. After enjoying one of its strongest two-day moves in years, U.S. crude futures are now only down by roughly 3% over the last month of trading. Before the significant rebound, WTI crude had fallen by nearly 25% since late-July.
On the Intercontinental Exchange (ICE), brent crude for October delivery experienced similar gains. North Sea brent futures wavered between $46.64 and $50.97 a barrel, before settling at $50.13, up 2.59 or 5.41% on the session. The spread between the international and U.S. benchmarks of crude stood at $4.88, below Thursday's level of $5.00 at the close.
On Thursday, the Wall Street Journal reported that Venezuela has contacted OPEC officials, including president Mohammed al-Sada in an effort to devise a strategy to halt the second extended crude rout on the calendar year. Venezuela, which sits on the largest crude reserves in the world, is reportedly working alongside Russia to convene an emergency meeting between OPEC's 12 member states. Currently, the representatives of the world's largest oil cartel are not scheduled to meet until early-December. Crude proceeds from Venezuela's state-run oil companies account for 50% of its government revenue, 95% of its exports and 25% of its GDP, according to the U.S. Council on Foreign Relations.
Last November, Opec roiled global energy markets with a strategic decision to keep its production ceiling above 30 million barrels per day. As a result, crude prices plunged more than 50% amid a glut of oversupply worldwide. While Saudi Arabian output leveled off slightly last month, OPEC production remained near record-highs at above 31 million bpd.
Oil services firm Baker Hughes (NYSE:BHI) also said in its weekly rig count report on Friday afternoon that oil rigs throughout the U.S. inched up last week, marking its sixth consecutive weekly gain. For the week ending August 21, U.S. oil rigs rose by one to 675, representing the eighth increase over the last nine weeks. The rig count is still down markedly from its peak above 1,600 last October, following 25 consecutive weeks of declines earlier this year.
Elsewhere, production in Northern Africa was disrupted after Shell (LONDON:RDSa) announced the shutdown of two major pipelines in Nigeria. The closure affected the Trans Niger Pipeline (TNP) and the Nembe Creek Trunkline (NCT), affecting the shipment of approximately 330,000 barrels throughout the nation. A leak on the TNP and a reported theft of crude on the NCT prompted the closures, a Shell spokesman said.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.5% to an intraday high of 96.35, before falling back slightly to 96.12 in U.S. afternoon trading. The index is on pace for its fourth consecutive positive close.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.