Oil surges as OPEC signals it’s open to “fair and reasonable” prices

HOUSTON — U.S. crude prices shot up nearly $4 a barrel after OPEC said in a monthly publication that it’s ready to speak to other oil producers to achieve a balanced market and better prices.

The 12-member Organization of Petroleum Exporting Countries, led by Saudi Arabia, “will continue to do all in its power to create the right enabling environment for the oil market to achieve equilibrium with fair and reasonable prices,” it said in its monthly OPEC Bulletin.

“As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field,” said the group, which has its de facto leader in oil monolith Saudi Arabia said. “OPEC will protect its own interests. As developing countries, its members, whose economies rely heavily on this one precious resource, can ill afford to do otherwise.”

West Texas Intermediate crude, the U.S. benchmark, climbed up $3.98 to $49.20 a barrel on the New York Mercantile Exchange, its highest point since mid-July. Brent, the international standard, rose $2.40 to $52.45 a barrel on the ICE Futures Europe, another high since mid-July.

Crude’s 14-month price slump has been driven by the global oversupply of oil, and so far this year OPEC has put out an additional 1.5 million barrels a day in an effort to carve out market share. The market took OPEC’s commentary Monday as a signal it may step off the pedal.

“It all depends on what the Saudis want,” said Andy Lipow, president of Houston-based Lipow Oil Associates. “Members of OPEC are concerned about these low oil prices and it wouldn’t surprise me if they talked up the market without making any real changes to production. OPEC has really stuck with waiting for demand to soak up the excess oil.”

OPEC production climbed 150,000 barrels a day in August to 32.3 million barrels a day, according to a survey by Bloomberg released Monday.