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. Hayley Platt reports.
A weak U.S. dollar and signs that OPEC could be close to agreeing production cuts have sent oil prices up 3 percent to a three week high. Brent crude futures rising above $48 dollars a barrel. While U.S. futures rose to just over $46.5 dollars a barrel. But markets have been here before. (SOUNDBITE) (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "OPEC don't have a very good history when it comes to sticking to oil supply quotas. So the market is pretty sceptical of that." Iran has been one of the main obstacles in the past. After only recently returning to the market after Western sanctions were lifted - it has been trying to recapture market share. Now it may only freeze production rather than cut. Libya and Nigeria have both said they want to be counted out of any deal. That leaves the onus on Saudi Arabia and its Gulf neighbours to take the brunt of the cuts. (SOUNDBITE) (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "We have just had a recent announcement from the US's BIS suggesting that for the first time in 40 years the US could be able to export some oil. So again that changes the environment for OPEC and it does seem that they perhaps are pressured now in order to regain some control and put prices higher." Russia - which isn't a member of OPEC - has also said it won't object to freezing ouput. It's currently pumping more than 11 million barrels a day - a post-Soviet high.