Crude oil prices jumped as high as 1% on Monday after Saudi Arabia agreed to cooperate on price stability to offset fears of an oil market glut.
Geopolitical risk is also heightened in the Middle East after Russia vowed to continue Syrian air strikes after the bombing of a Russian jet.
Oil weighed earlier in the session after a broader commodities selloff and a stronger dollar.
In a recent statement, Saudi Arabia agreed to cooperate with other oil-producing countries in an attempt to stabilize prices. The statement came as oil prices were just barely able to hold above a 2 1/2 month low. The remarks were met with a mix of skepticism and enthusiasm. Similar pledges have been made in the past, but output remains high in order to maintain market share. As a result, crude prices have slipped 50% over the last year.
Brent futures jumped 1.2% ($.54) to reach $45.20 a barrel. U.S. crude futures climbed 0.4% ($.17) to reach $42.07 a barrel.
Many investors are unconvinced that oil’s rebound will last, and point to increasing discounts in WTI. WTI’s front-month dropped to $38.99 per barrel Friday to trade at rates just above its August low of $37.75.