OPEC’s intention to freeze output pushed oil close to $50 a barrel

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The Organization of Petroleum Exporting Countries (OPEC) is going to discuss a potential deal to freeze output during informal talks next month in Algiers.

OPEC has already discussed such an option in April but did not succeed. Iran denied to take part in restrictions as it was restoring exports after sanctions over its nuclear program were lifted in January while Saudi Arabia said it wouldn’t take part without Iranian participation.

Talks of a potential output freeze pushed oil close to $50 a barrel and made money managers to cut bets on falling prices by the most ever.

“This was a very short market so we were bound to get some covering. You probably won’t hear a lot from OPEC with prices up here, but if we get down to where we were a few weeks ago we can expect to hear more,” said Stephen Schork, president of the Schork Group Inc., a consulting company in Villanova, Pennsylvania.

Saudi Arabia, Iran, Iraq and Russia (not an OPEC member) are producing at maximum capacity. Saudi Arabia told OPEC that its production rose to an all-time high of 10.67 million barrels a day in July.