12/02/2016 11:23 PM IST | Updated 15/07/2016 8:26 AM IST

Oil Boils On OPEC Cut Talk, Up 11% In A Day

Anadolu Agency via Getty Images
KOCAELI, TURKEY - FEBRUARY 3: Smoke rises over the Tupras, Turkeys only oil refiner, Izmit Refinery after a blaze caused by the breakdown of the equipments in Kocaeli, Turkey on February 3, 2016. (Photo by Kadir Yildiz/Anadolu Agency/Getty Images)

U.S. crude prices jumped more than 10 percent on Friday after a report once again suggested OPEC might resort to a production cut to reduce the world glut, and resilient stock markets added to the risk appetite in oil.

In spite of the about-turn after one of the most volatile weeks for oil, prices were poised to end the week up to 7 percent lower.

The United Arab Emigrates' energy minister said the Organization of the Petroleum Exporting Countries was willing to cooperate on an output cut, the Wall Street Journal reported after Thursday's settlement in U.S. and Brent crude futures. He also said cheap oil was forcing supply reductions that would help rebalance the market.

The UAE's comments, coming after vain efforts earlier in the week by Venezuela and Russia to stir Saudi Arabia and other major producers into agreeing to output cuts, was initially greeted with skepticism by many traders.

But after a 75 percent price slump since mid-2014 that has taken crude prices to more than 12-year lows, many were also inclined to believe that a rebound was due sooner or later if production tightens or demand picks up.

"We expect declining U.S. oil production, in particular, to drive the oil price back up to $50 per barrel by the end of the year," Frankfurt-based Commerzbank said in a note.

U.S. crude CLc1 was up $2.68 at $28.89 per barrel by 12:15 p.m. EST, after rallying as much as 12 percent earlier to $29.41. Just on Thursday, it hit a 12-year low of $26.05. For the week, it was on track for a 6.5 percent loss.

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