Investing.com - Oil prices jumped more than 1% on Tuesday as Iran put an abrupt end to hopes of a rapprochement with the U.S. and OPEC issued a report suggesting that its members and allies are still showing discipline in holding output back from the market.
OPEC's Joint Ministerial Monitoring Committee reported that OPEC and its allies collectively produced substantially less than the limits agreed in their output restraint pact in July, exceeding the agreed cuts by more than 50%, the most so far this year.
New York-traded West Texas Intermediate crude futures gained 75 cents, or 1.4%, to $54.39 a barrel by 7:35 AM ET (11:35 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 66 cents, or 1.1%, to $58.78.
Overall compliance jumped to 159% in July from 137% in June and an average rate of 134% since January.
“This high level of overall conformity has offset uncertainty in the market due to ongoing economic growth worries,” the JMMC said in a press release.
The JMMC said the situation should lead to “significant draws” in global inventories in the second half of 2019.
Also supporting oil prices, Iranian President Hassan Rouhani ruled out talks with U.S. President Donald Trump until sanctions imposed on Tehran were lifted, according to media reports.
U.S. economic sanctions against Tehran have reduced Iranian oil exports, adding to OPEC-led efforts to combat the global supply glut.
Analysts at London Capital Group said that a sit down between Trump and Rouhani could create the “potential for easing tensions in the Middle East, possibly sending oil $5 -$10 lower”.
In other energy trading, gasoline futures rose 1.6% to $1.5315 a gallon by 7:37 AM ET (11:37 GMT), while heating oil advanced 1.0% to $1.8191 a gallon.
Lastly, natural gas futures traded down 0.3% to $2.226 per million British thermal unit.