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NEW YORK Brent crude oil gained more than 1 percent on Thursday, snapping a six-day losing streak as low prices sparked buying by bargain hunters and with traders anticipating OPEC rumblings about cutting production if prices keep falling.
Brent's 10-percent price slide this month and U.S. crude's drop in four out the previous five sessions left prices technically oversold, traders and analysts said.
"We haven't seen any change in the fundamentals, so the view that we're in oversold territory is probably true," said Gene McGillian, broker and analyst at Tradition Energy in Stamford, Connecticut, adding that traders with long bets on crude oil prices had likely eased their liquidation selling.
Brent crude futures for June delivery rose $1.44 to settle at $99.13 a barrel, having fallen to $96.75, its weakest since July, only to rally back.
Prices rose more than $2 in post-settlement trade, reaching $99.72 by 3:18 p.m. EDT (1918 GMT).
U.S. front-month May crude jumped $1.05 to settle at $87.73 a barrel, after earlier shedding more than $1 to $85.61, a 2013 low. It reached $88.46 in post-settlement trade.
The relative strength index (RSI), a technical momentum indicator, was below 30 for Brent and just above 30 for U.S. crude, most of Thursday before pushing higher in post-settlement trading.
A reading of 30 or below indicates an oversold condition to chart-watching traders, and Brent has been below 30 for the past five trading sessions.
WILL OPEC CUT OUTPUT?
Traders and analysts already are bracing for a possible reaction from the Organization of the Petroleum Exporting Countries to the recent price plunge, with many of the member governments seeing revenue needed to balance budgets evaporate.
Venezuela's oil minister on Thursday expressed concern about falling prices and said that OPEC ministers were discussing calling an extraordinary meeting because of falling prices.
Iran's oil minister had already said OPEC members will discuss holding an emergency meeting if oil prices stay below $100 a barrel, it was reported by Iran's Press TV, an idea that received little initial support from members across the Gulf.
The next OPEC meeting is scheduled for May 31.
"Oil prices below $100 per barrel could be short-lived as rumors are already beginning to circulate about a concerted move towards a drop in oil production from OPEC, in a repeat of what happened last year when oil dropped below $90 per barrel," Gary Hornby, an energy analyst at Inenco, said.
"This could well force oil traders to start purchasing again after the steep falls we have seen, even before any potential production cut is agreed."
Seaborne oil exports from OPEC, excluding Angola and Ecuador, will fall by 220,000 bpd in the four weeks to May 4, British consultant Oil Movements said in its weekly estimate on Thursday.
Other supply concerns supported crude oil prices, especially Brent, after Royal Dutch Shell (RDSa.L) on Wednesday declared force majeure on Nigerian Bonny Light crude exports after shutting down the 150,000-barrel per day (bpd) Nembe Creek pipeline for repairs.
Gas oil stocks at Europe's Amsterdam-Rotterdam-Antwerp hub fell 4.6 percent last week, with jet fuel and gasoline inventories also slipping, according to data released Thursday by Dutch oil analyst Patrick Kulsen.
Reports showing a gauge of future economic activity fell in March and factory activity in the mid-Atlantic region contracted in April briefly sent both Brent and U.S. crude oil down before they resumed their upward climb.
A rise in jobless claims added to Thursday's less-than-supportive data and the weak economic news pressured U.S. equities. The weaker dollar index .DXY helped give dollar-denominated oil prices a boost. .N <USD/>
"A lot of the selling has already been done," said Phil Flynn, an analyst at Price Futures Group in Chicago.
"The data reflect the fears that we played out early this week and last week."
U.S. heating oil also rose more than 1 percent.
U.S. gasoline gained nearly 1 percent, tagging along with crude after Wednesday's U.S. Energy Information Administration report said gasoline demand was at a 16-year low.
Oil price gains may be capped by concerns about political uncertainty in the euro zone, where Italy's parliament failed to elect a president in its first vote on Thursday.
Choosing a leader is seen as a crucial step toward resolving a stalemate since the inconclusive election in February and for the government to carry on with fiscal reforms. (Additional reporting Simon Falush in London, Jessica Jaganthan in Singapore and Osamu Tsukimori in Tokyo; editing by Gunna Dickson)