Crude Oil prices held sharp gains in Asia on Monday in a rebound from last week's downbeat finish as Venezuela at the weekend suggested a deal by major producers to freeze output has gained momentum. On the New York Mercantile Exchange, crude oil for delivery in October jumped 1.83% to $44.42 a barrel. On the ICE Futures Exchange in London, Brent oil for November delivery soared 1.70% to $46.55 a barrel. Last week, oil futures fell sharply on Friday, with U.S. crude prices touching a more than five-week low as signs of an ongoing recovery in U.S. drilling activity combined with increasing exports from OPEC added to concerns over a global supply glut.
Market players continued to focus on U.S. drilling prospects, amid indications of a recent recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 2 to 416, marking the 11th increase in 12 weeks. That came after government data published on Wednesday showed large weekly builds in U.S. petroleum products.
According to the U.S. Energy Information Administration, distillate inventories including diesel, increased by 4.619 million barrels last week, much higher than expectations for a rise of 1.543 million barrels. The jump was the biggest weekly build since January and put distillate stocks at six-year seasonal highs. The report also showed that gasoline inventories rose by 567,000 barrels, disappointing expectations for a 343,000-barrel drop.