Investing.com -- U.S. crude futures bounced from 12-year lows on Friday, completing one of their strongest one day moves on record, as investors digested reports that OPEC could be moving closer to convening for an emergency meeting that may result in sorely needed production cuts.
On the New York Mercantile Exchange, WTI crude for March delivery traded between $26.96 and $29.66 a barrel, before settling at $29.27, up 3.03 or 11.56% on the day. With the sharp gains, U.S. crude halted a six-day losing streak during which oil prices crashed more than 16%, to fall to its lowest level since May, 2003. At Friday's session-highs, WTI crude surged more than 12%, enjoying its best one-day moves since February, 2009.
On the Intercontinental Exchange (ICE), brent crude for April delivery wavered between $29.93 and $33.43 a barrel, before closing at $33.19, up 3.11 or 10.30% on the session. North Sea brent futures have responded to a massive four-day sell off from late last week by rallying more than $2 a barrel during its current three-day winning streak.
Despite Friday's rebound, both the international and U.S. benchmarks are down considerably in 2016 by more than 10 and 20% respectively.
Minutes after closing at its lowest in more than a decade on Thursday afternoon, U.S. crude prices received a boost following a report from the Wall Street Journal that OPEC members are preparing to cooperate on potential production cuts, according to United Arab Emirates' energy minister Suhail bin Mohammed al-Mazrouei. The UAE is regarded as a key cog for smaller OPEC members desperate for increases in oil prices, given its reluctance to slash output in recent months.
While Al-Mazrouei indicated that the persistent downturn had already forced most Non-OPEC members to reduce output, he emphasized that a potential deal could not be achieved unless OPEC received "complete cooperation" of all of its member states.
"Prices are not appropriate, I won't say for the majority only, but for all producers," Al-Mazrouei told Sky News Arabia.
Any deal requires the approval of Saudi Arabia, the world's largest exporter. Earlier this week, OPEC said in its monthly Oil Market Report that it increased production by 131,000 barrels per day to 32.33 million bpd in January, driven by increases from Saudi Arabia, Iraq, Iran and Nigeria. Output in Saudi Arabia rose by 44,000 bpd to 10.091 million bpd, near all-time record highs.
Over the last 15 months oil prices have plummeted more than 60% since OPEC rattled the energy industry with a strategic decision to leave its production ceiling above 30 million barrels per day at a meeting in November, 2014. The tactic triggered a prolonged battle between OPEC and U.S. shale producers for market share, resulting in a glut of oversupply on global energy markets.
Producers in the U.S. also stand to benefit tremendously from a production cap. On Wednesday, the U.S. Energy Information Administration reported that stockpiles at the Cushing Oil Hub rose by 523,000 barrels to 64.7 million last week, moving closer to full capacity. Cushing, the main delivery point for NYMEX oil, reaches its storage limit at 73 million barrels.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.45% to an intraday high of 96.25. Since the FOMC released its latest monetary policy statement on Jan. 27, the dollar has fallen by approximately 4%.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.