Investing.com -- Crude futures rose sharply, hitting near two-week highs on Monday, as investors reacted to bullish comments from OPEC president Mohammed bin Saleh al-Sada on the possibility of an accord between member states at a meeting in Algeria in late-September aimed at stabilizing the volatile global energy market.
On the New York Mercantile Exchange, WTI crude for September delivery traded between $41.83 and $43.38 a barrel before closing at $43.03, up 1.23 or 2.94% on the session. On the Intercontinental Exchange (ICE), brent crude for October delivery wavered between $44.25 and $45.57 a barrel, before settling at $45.38, up 1.11 or 2.51% on the day. At session-highs, the front month contract for U.S. crude surged to its highest level since July 24.
Last week, WTI crude fell as low as $39.19 a barrel, closing below $40 on August 2 for the first time since April. Brent crude also traded on Monday at its highest level since late-July, up more than 8% from last week's lows of $41.51 a barrel. Crude prices received significant pressure to the upside on Monday after Al-Sada emphasized that the global oil market remains on pace for rebalancing in spite of signals of continued volatility worldwide. Al-Sada, who also serves as the energy minister of Qatar, said Monday in a closely-watched statement that OPEC will hold an informal meeting of member countries on the sidelines of the International Energy Forum in Algeria on Sept. 26-28.
"The recent decline observed in oil prices and the current market volatility is only temporary," Al-Sada said in a statement. "OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market."
The statement was released days after data indicated that hedge funds increased their short positions in WTI crude last week to the highest level in a decade. On Friday, the U.S. Commodity Futures Trading Commission (CFTC) said short positions in WTI futures and options rose to 218, 623 for the week ending on Aug. 2, the highest amount since 2006. Over the last three weeks, hedge funds have nearly doubled their short positions in WTI crude, according to the CFTC.
Last week, oil prices plunged to their lowest level since talks at a highly-anticipated meeting in Doha collapsed in mid-April. Prior to the oil summit in Qatar, U.S. crude futures surged nearly 40% from their level in mid-February on hopes of a coordinated production freeze between Russia, Saudi Arabia and two other major producers. On Feb. 11, WTI crude sank to a 13-year low at $26.05 a barrel.
Oil prices rose sharply on Monday in spite of signals of weakening demand in China. In July, China's exports plunged 4.4% in U.S. dollars while its imports plummeted 12.5% in dollar-denominated terms. China, the world's second-largest consumer of oil behind the U.S., imported roughly 7.62 million barrels in May, a four-month low.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.20% to an intraday high of 96.42. The index is still down by more than 1% since hitting four-month highs of 97.62 in late-July. Dollar-denominated commodities such as Crude become more expensive for foreign purchasers when the dollar appreciates.