Oil Extends Rally on Prospects OPEC Could Act to Counter Low Prices

London: Oil prices rose on Monday, extending a rally triggered last week by speculation that OPEC (Organization of Petroleum Exporting Countries) might agree to cut production to reduce a supply glut that has pushed prices to the lowest in over a decade.

Brent crude futures, the global benchmark, were up 21 cents at $33.57 a barrel at 1428 GMT (7:58 p.m. in India). US futures traded at $29.68 a barrel, up 24 cents on Friday's close. Trade is likely to be thinner than usual on Monday due to the US Presidents Day holiday.

"Some traders still think about the chances of an OPEC plus Russia (production) cut and close their short positions," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

The United Arab Emirates' energy minister said OPEC was willing to cooperate on an output cut, the Wall Street Journal reported last week.

And Nigeria's oil minister told Reuters the mood inside OPEC was shifting to a growing consensus that a decision must be reached on how to prop up prices.

Non-OPEC member Russia said on Monday it was in talks on coordinated output cuts with individual OPEC members, mainly Venezuela, but not with the organisation itself, news agency Interfax quoted Russia's representative to OPEC as saying.

"The fact that the market has reacted so strongly certainly indicates that these comments are being taken seriously," analysts at Frankfurt-based Commerzbank wrote.

However, many analysts, including the International Energy Agency, are still sceptical OPEC will cut a deal with other producers to reign in ballooning output.

"We continue to believe that if prices were to be artificially supported with production cuts it would only give more expensive forms of production more room to breathe and would only solve the problem in the short term," Phillip Futures said in a note.

Iran is exporting 1.3 million barrels per day (bpd) of crude, and will be pumping 1.5 million bpd by the start of the next Iranian year on March 20, a vice-president was quoted as saying on Saturday.

Iran would load 4 million barrels of crude on tankers destined for Europe in the coming 24 hours, a senior official was quoted as saying.

Ben van Beurden, chief executive of oil company Shell, said on Monday that volatility in oil prices may stabilise later this year and that prices could rebound after that.