Investing.com - Oil prices turned higher during North American hours on Monday, reversing overnight losses after Saudi Arabia's energy minister said he was optimistic a production deal could be reached by November.
Speaking at the World Energy Congress in Istanbul, Khalid al-Falih said OPEC needed to behave in a balanced and responsible manner and that he continued to believe in its important role.
He added that the oil group needed to ensure it does not crimp oil supply too tightly and give the market a harmful shock.
Brent oil for December delivery on the ICE Futures Exchange in London tacked on 60 cents, or 1.15%, to $52.53 a barrel by 8:10AM ET (12:10GMT).
The contract fell by as much as 1.2% earlier to a session low of $51.30, after comments made by Russia's energy minister cast doubt over a deal to cut output to rein in global oversupply at a meeting in Turkey this week.
Furthermore, reports that Iraq and Iran will not attend this week's conference in Turkey have also highlighted problems with the proposed production cuts.
Energy ministers who will be present in Istanbul as it hosts the congress include those of the United Arab Emirates, Algeria, Venezuela and Qatar, which holds the OPEC presidency.
The meeting in Istanbul is expected to be more bilateral gatherings rather than one single meeting of both OPEC and non-OPEC states, one OPEC source said on Sunday.
The Organization of the Petroleum Exporting Countries reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month, a reduction of 0.7%-to-2.2% from its current output of 33.2 million barrels.
However, market analysts remained skeptical of the deal, pondering how such a plan would be implemented.
The 14-member oil group said it won’t finalize details or complete its production agreement until the group’s next official meeting in Vienna on November 30.
London-traded Brent futures rallied to $52.84 last week, the most since June 9. The contract surged $1.74, or 3.35%, last week, the third straight weekly gain.
Elsewhere, crude oil for November delivery on the New York Mercantile Exchange rose 53 cents, or 1.05%, to $50.34 a barrel after declining as much as 1.3% earlier to an intraday trough of $49.15.
Market players continued to focus on U.S. drilling prospects, amid indications of an ongoing recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 3 to 428, marking the 14th increase in 15 weeks.
Some analysts have warned that the current rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, underlining concerns over a global supply glut.
New York-traded oil touched a four-month peak of $50.74 in the prior session. The benchmark rose $1.57, or 3.15%, last week, after posting gains in each of the past two weeks.
There will be no floor trading on the Nymex on Monday because of the Columbus Day holiday in the U.S. All electronic transactions will be booked with Tuesday's trades for settlement.