Investing.com - Oil prices erased an earlier decline that took U.S. crude below $50 for the first time in more than a year and jumped on reports that Russia recognized the need for major producers to cut production.
New York-traded West Texas Intermediate crude futures rose 98 cents, or 1.98%, at $51.27 a barrel by 9:35 AM ET (14:35 GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded up 71 cents, or 1.20%, to $59.80.
The Russian Energy Ministry held a meeting with its country’s domestic producers and talks revealed that there was a consensus that an output reduction was necessary and parties were analyzing the size and timing of cuts, Reuters reported citing sources familiar with the talks.
Crude prices had taken a hit earlier on Thursday as reports surfaced that Russian President Vladmir Putin was comfortable with a $60 dollar barrel of oil. The Russian leader had insisted that the budget would be balanced with prices as low as $40 a barrel, spooking investors who read the remarks as a sign that Russia might not agree to further cuts.
West Texas Intermediate oil fell more than 1% to hit $49.46, the first time it had been below $50 since October 2017.
Saudi Arabia has been pushing OPEC and its non-OPEC allies led by Russia to agree to reduce production given the more-than-30% decline in prices since last October.
Analysts believe that the group will announce a reduction of 1.1 million barrels per day when they meet in Vienna on Dec. 6-7.
With the U.S. and Saudi Arabia producing at record levels and rising inventories in the U.S., investors have been concerned that OPEC will be unable to counteract increasing supply.
Traders will meanwhile keep an eye on this weekend’s G20 summit, where Putin is expected to meet on the sidelines with Saudi Arabia’s Crown Prince to discuss plans for output.
In other energy trading, gasoline futures gained 1.72% to $1.3998 a gallon by 9:36 AM ET (14:36 GMT), while heating oil advanced 0.51% to $1.8445 a gallon.
Lastly, natural gas futures traded down 3.32% to $4.543 per million British thermal units.