Comments from Saudi Arabian officials stirred speculation OPEC could be considering abandoning its market-based pricing strategy, but the cartel is unlikely to change policy and it heads into next week's meeting less relevant than ever.
Oil surged Monday on remarks from Saudi officials that the country is willing to work with oil producing and exporting countries, both inside and outside of OPEC to maintain market and price stability. West Texas Intermediate crude futures shot higher after the comments but then fell back and fluctuated.
"It's really just short covering. The Saudi comments are a reminder to the market that the Saudis aren't powerless, but OPEC is overall for sure. At some point, the sell-off will be vulnerable to a production response. The fact of the matter is if they really do cut production by a million or 2 million barrels, the market would react to that. I don't think they're ready to do that yet," said oil analyst John Kilduff of Again Capital.