​Oil Prices Soar After Venezuela Talks of Output Accord

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Dan Weil | FlashRatings | Monday, September 19, 2016 1:37 PM EDT
Oil prices jumped more than 2 percent Monday after Venezuelan President Nicolas Maduro said OPEC and non-OPEC countries are near an agreement to stabilize the market.

A “definitive answer” for the two-year plunge of oil prices could arise this month, he said, according to the Twitter account of Petroleos de Venezuela. 

To be sure, many predictions of OPEC agreements for a production freeze have come and gone in recent months, amid opposition from Iran, Libya and Nigeria. And the dictatorship led by Maduro hasn’t received high marks for honesty.

The 14 OPEC energy ministers along with Russia’s are scheduled to hold informal talks about oil in Algiers next week at the International Energy Forum. Other OPEC members held out only slight hope for an accord there. 

“It is an informal meeting, not a decision-making meeting,” Mohammed Barkindo, OPEC’s secretary-general, told Algerian state media organization APS on Saturday night. Libya’s OPEC minister Mohamed Oun told The Wall Street Journal his country isn’t agreeing to anything if it isn’t allowed to increase production.

Many analysts are skeptical that OPEC can boost oil prices. “Demand growth and non-OPEC supply are not co-operating. The day when supply and demand will be in balance has once again been pushed back,” David Hufton of London brokerage PVM. “Indeed, it is reasonable to ask if it will ever arrive.” 

U.S. crude for October delivery traded at $43.94 Monday morning, up 91 cents from Friday.