Investing.com - Oil prices rose to fresh three-month highs in North American trade on Tuesday, reversing earlier losses as investors shifted their focus back towards ongoing talk of a potential output freeze by major producers.
On the ICE Futures Exchange in London, Brent oil for May delivery rose 34 cents, or 0.83%, to trade at $41.18 a barrel by 13:35GMT, or 8:35AM ET, after climbing to an intraday peak of $41.46, the most since December 9.
A day earlier, London-traded Brent futures soared $2.12, or 5.48%, as continued hopes major oil producers will discuss a potential output freeze lifted prices.
On Monday, South American producers said they would meet to talk about action to support prices. Ecuador's Foreign Minister, Guillaume Long, said his government will host a meeting in Quito on Friday with Venezuela, Colombia, Ecuador and Mexico "to reach consensus over oil, especially prices."
Brent futures are up by roughly 30%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
A meeting is planned later this month in which producers will discuss the details of the proposed action.
Elsewhere, crude oil for April delivery on the New York Mercantile Exchange hit a session high of $38.37, a level not seen since January 4, before falling back to $38.11 in U.S. morning hours, up 22 cents, or 0.58%.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 3.6 million barrels in the week ended March 4.
On Monday, New York-traded oil futures rallied $1.98, or 5.51%, amid indications U.S. shale oil drillers are cutting back on production and on the growing view that a 20-month-long market rout is finally coming to an end.
Since falling to 13-year lows at $26.05 on February 11, Nymex oil prices have rebounded by approximately 33% as a decline in U.S. shale production boosted sentiment.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share, driving down prices by more than 70% over the past 20 months.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $3.07 a barrel, compared to a gap of $2.94 by close of trade on Monday.