Oil prices rose 3 percent on Monday to their highest in three weeks, catching a lift from a weaker dollar, as OPEC appeared to be moving closer to agreeing an output cut when it meets next week.
Brent crude futures LCOc1 gained $1.44 to $48.30 a barrel by 1423 GMT, having touched their loftiest level since Nov. 1, while U.S. West Texas Intermediate (WTI) futures CLc1 strengthened by $2.01 to $47.70 a barrel.
Brent has risen 11 percent in a week since OPEC’s de facto leader Saudi Arabia started a diplomatic charm offensive to persuade the group’s more reluctant members to join its proposed output cut.
The dollar eased off last week’s 13-1/2-year highs as Treasury yields nudged lower, bolstering oil and the broader commodities complex including copper CMCU3 and gold XAU=.
“The possibility for such a deal has increased, but there is also the risk of course that the market is overreacting here, especially as the agreement will really have to be a surprise to push oil prices very much higher,” ABN Amro chief energy economist Hans van Cleef said.
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