More surprises in the oil market as crude oil futures rose on Friday after rallying to their biggest one day rally in six years the day before.
News of reduced supplies led the rally as well as reports of a possible meeting by OPEC and other world oil producers to discuss a possible production cut to help stem the drastic drop in oil prices that has occurred over the last few months.
Participation by OPEC or Russia in an emergency meeting is seen as unlikely but the suggestion sounded optimistic and seemed to bolster the prices of oil futures.
West Texas Intermediate crude for October jumped $3.96, or 10.3%, to settle at $42.56 a barrel on the New York Mercantile Exchange. This was the largest single-session percentage gain for a most-active contract since March 2009. This followed Monday’s price drop which hit below $39 for the first time since February 2009.
October Brent crude on London’s ICE Futures exchange climbed $4.42, or 10.3%, to $47.56 a barrel for the biggest percentage gain since December 2008.
Equities Up
Oil prices followed the lead of global equity markets which rallied across the board Thursday. Positive U.S. economic data, which showed lower job claims and an annual GDP increase of 3.2 percent, helped increase market confidence, sending the Dow industrials DJIA up 2.27% for the day. In China, the Shanghai Composite Index surged 5.3% to end a five-day losing streak.
"The recovery in commodity prices looks fragile with concerns over China's growth still weighing on market activity," said one ANZ representative. “This might just be a short rally.”
