NEW YORK: Crude prices jumped about 4 percent on Tuesday after No. 1 oil consumer the US cut output forecasts and Russia, Saudi Arabia and other big producers signaled joint action to support the market.
A weakening dollar added support for oil, aside from bets that the US oil rig count could tumble again this week after last week’s unexpectedly sharp decline of 26 rigs.
Brent, the global benchmark for crude, was up $2, or 4 percent, at $51.25 a barrel by 1458 GMT.
Traders also cited technical buying for Brent at above $50 a barrel as it headed for its first three-day gain in a stretch after Monday’s rise of more than 2 percent and Friday’s climb of nearly 1 percent.
West Texas Intermediate (WTI), the US crude benchmark, rose $1.64, or 3.6 percent, at $47.90.
“We have reduced the probability of a return to the $37-38 area per nearby WTI,” said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago.
“We will maintain a long standing view that price declines below this support level are virtually off of the table.”
On Tuesday, the US Energy Information Administration projected in its monthly forecast that the country’s crude output will fall through mid-2016. The EIA also raised its 2016 world oil demand growth forecast to 100,000 barrels per day to 1.41 million bpd.
Crude prices jump about 4%
