Oil prices surged Tuesday on profit-taking following a rally in the previous session triggered by signals that the world’s biggest producers of crude may act jointly to support prices, which have halved over the past year.
Brent crude, the global oil benchmark, was up $1.28, or 2.6 percent, at $50.53 a barrel by 9:53 a.m. EDT (1353 GMT). It rose 2.3 percent on Monday.
The U.S. benchmark, West Texas Intermediate crude, rose $1.07, or 2.3 percent higher at $47.33 a barrel. The contract gained 1.6 percent in the previous session.
“The move is mainly down to profit-taking at this point,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
“I don’t see much direction upwards at this time. I can’t see where it should come from because there’s no change in fundamentals expected.”
Brent prices touched an intra-day high of $49.52 a barrel after Russia’s energy minister said Russia and Saudi Arabia had discussed the oil market in a meeting last week and would continue to consult each other.
This was in line with comments made by OPEC Secretary-General Abdullah al-Badri at a conference in London that OPEC and non-OPEC members should work together to reduce the global supply glut.
“There is one problem we are facing: the overhang,” he said, adding there were already signs of higher crude demand and of a drop in supply growth from non-OPEC members.
In similarly bullish comments, the former head of U.S. shale producer EOG Resources said at the same conference that U.S. oil production growth would tail off this month and start to decline early next year due to weak prices.
Iran’s crude oil sales were on track to slip to the lowest in seven months as its main Asian customers were buying less than before.
The drop counters expectations that Iran’s exports would rise after Tehran and six world powers reached a nuclear agreement on July 14, although sanctions are unlikely to be officially relaxed until next year.