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Brent crude rose for the first time in a week amid speculation that the drop in prices below $80 a barrel increases the likelihood that OPEC will cut production. West Texas Intermediate was little changed in New York.
Futures gained as much as 1.5 percent in London. OPEC producers have stepped up their diplomatic visits before the group's meeting in two weeks, potentially seeking a consensus on how to react to oil prices that have plunged to a four-year low. Prices could slide further in the coming months as the market enters a period of weaker demand, the International Energy Agency said today.
Oil has collapsed into a bear market as leading members of the Organization of Petroleum Exporting Countries resisted calls to cut production and the U.S. shale boom lifted output to the highest level in three decades. Brent is heading for its eighth weekly decline, the longest retreat since the contract began trading in 1988.
"I think the market is basically coming to the conclusion today that this latest price drop has actually increased the likelihood of action from OPEC," Ole Sloth Hansen, an analyst at Saxo Bank A/S, said by phone from Copenhagen. "If there's anything that can motivate some action, it's these oil prices."
Brent for January settlement climbed as much as $1.19 to $78.68 a barrel on the London-based ICE Futures Europe exchange and traded for $78.57 at 12:54 p.m. local time. The December contract expired yesterday after losing $2.46 to $77.92, the lowest since September 2010. The European benchmark traded at a premium of $4.08 to WTI for the same month on ICE.
WTI for December delivery climbed 32 cents, or 0.4 percent, to $74.53 a barrel in electronic trading on the New York Mercantile Exchange. That's about half of its record high at $147.27 in 2008. The contract lost $2.97 to $74.21 yesterday, the lowest close in more than four years. The volume of all futures traded was about twice the 100-day average for the time of day. Prices have declined 24 percent this year.
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