Oil pares earlier gains. Investing.com - Oil prices trimmed earlier gains during North American hours on Monday, after an announcement from Saudi Arabian and Russian officials failed to live up to market expectations.
On the ICE Futures Exchange in London, for November delivery jumped more than 5% to touch a daily peak of $49.40 a barrel earlier in the day before giving back some gains to trade at $47.18 by 8:42AM ET (12:42GMT), up just 35 cents, or 0.75%.
Meanwhile, for October delivery on the New York Mercantile Exchange tacked on 77 cents, or 1.74%, to trade at $44.92 a barrel after soaring more than 5% to a session high of $46.53.
Oil prices spiked sharply on reports that Saudi Arabia and Russia planned to make a joint statement at the G20 meeting in China on Monday. But futures started to give back some gains amid disappointment over the details of the agreement.
The world’s two largest oil producers said they will set up a working group to monitor the oil market and come up with recommendations to promote stability, according to reports.
Saudi Arabian oil minister Khalid al-Falih and his Russian counterpart, Alexander Novak, will meet in Algeria in October and in Vienna in November to discuss how to cooperate under the new agreement, the reports said.
OPEC members are set to discuss a potential production cap at an informal meeting on the sidelines of an energy conference in Algeria between September 26-28.
On Friday, crude settled 3% higher after Russian President Vladimir Putin said in an interview with Bloomberg that an agreement between major oil exporters to freeze output would be the right decision to support the market.
His comments followed similar rhetoric from Saudi Arabia's foreign minister Adel al-Jubeir, who reportedly said on Thursday that some sort of a production agreement could be made between OPEC and non-OPEC producers at this month's meeting.
Despite the supportive remarks, chances that the upcoming meeting in late September would yield any action to reduce the global glut appeared minimal, according to market experts. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Trade volumes were expected to remain light on Monday, with many investors in the U.S. away for the Labor Day holiday. Trading in oil ends at 1:00PM ET, while U.S. stock markets are closed for trading all day.