Oil soared on Monday for a third consecutive day, with Brent crude rising more than 8 percent, as a downward revision of U.S. output data and OPEC's readiness to talk with other producers helped extend the biggest price surge in 25 years.
U.S. oil prices have skyrocketed more than $10 a barrel in three days, erasing the month's declines as a series of relatively small-scale supply disruptions and output risks prompted bearish traders to take profits on short positions, which had been at near record highs a week ago.
On Monday, prices fell initially but reversed course mid-morning to accelerate into the close.
They were aided by a commentary in the latest OPEC Bulletin publication suggesting the group may be increasingly willing to talk to other producers about curbing output.
"As the organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field. OPEC will protect its own interests," according to the report.
Brent October futures rose $4.10, or 8.2 percent, to settle at $54.15 a barrel, with volumes relatively muted by a UK public holiday.
U.S. crude gained $3.98, or 8.8 percent, to settle at $49.20 a barrel, taking three-day gains to 27.5 percent, the most over three days since August 1990. In dollar terms, it is the biggest three-day gain since February 2011.
"With the worst of the bad news priced in following last weeks capitulation trade, a very shorted oil market has traders running for cover," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
The rally was also fueled by revised U.S. government figures showing that domestic production in the first half of the year was lower than initially reported.
U.S. crude oil production peaked at just above 9.6 million barrels per day (bpd) in April before falling by more than 300,000 bpd during the following two months, Energy Information Administration data released on Monday showed.
© 2022 Thomson/Reuters. All rights reserved.