U.S. crude surged above $50 a barrel for the first time in more than three weeks, as a report surfaced that OPEC members are considering cutting production more deeply to tackle a persistent supply glut that has weighed on prices.
U.S. West Texas Intermediate crude futures for June delivery were nearly 2 percent higher at $50.24 a barrel by 10 a.m. ET. That put WTI above the key level of $50.22 a barrel, the high for the week of April 24 — just before oil prices broke below a number of technical levels, culminating in a “flash crash” to $43.76.
Most of Friday’s trading volume was in futures for July deliver, which will soon take over as the front-month contract. July WTI was trading solidly above $50 a barrel.
U.S. West Texas Intermediate Crude for July delivery
However, oil prices still remain in a range in which they are vulnerable to profit-taking.
Analysts told CNBC a rally on Monday was primarily driven by short-covering — or closing bets that oil prices would fall further — after top oil producers Russia and Saudi Arabia agreed to extend production cuts among two dozen exporters through March 2018.
OPEC members meet on Thursday to determine whether to roll over their deal to remove 1.2 million barrels a day from the market in order to shrink historic global crude stockpiles.