Oil futures rallied on Monday (8 August) following market speculation that major producers would come together and conjure up another plan to freeze production, with fears of market imbalances having dominated the past week.
At 4:15pm BST, the Brent front month futures contract was up 2.21% or 98 cents to $45.25 per barrel, while the West Texas Intermediate was up 2.63% or $1.10 to $42.90 per barrel, reversing some of the past week's declines as the Organization of Petroleum Exporting Countries (Opec) suggested its members would hold an "informal meeting" on the side-lines of the International Energy Forum due to be held in Algeria from 26 to 28 September.
Selected Opec members have said the event could serve as a platform to revive talks between Opec and non-Opec oil producers on a global output freeze. However, Russia, a major non-Opec oil producer appeared dismissive of the move.
According to RIA Novosti, the country's Energy Minister Alexander Novak, said: "If other countries raise the issue of a freeze, we are ready to discuss this. But the position of Russia is that the prerequisites for this have not yet come to pass, considering that prices are still at a more or less normal level."
However, Novak added that a massive fall in prices could trigger a change in Moscow's thinking. Meanwhile, Qatar's energy minister and current Opec president, Mohammad bin Saleh al-Sada claimed the oil market is on the path to rebalancing despite the recent decline in global oil prices.
"The recent decline observed in oil prices and the current market volatility is only temporary. Opec continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market."
Market commentators say the situation is getting desperate for some producers and is likely to worsen before it gets better.
Analysts at Vienna-Based JBC Energy said: "Several Opec countries are attempting to take another crack at freezing output. While the last try a few months ago failed spectacularly, declarations from some Opec countries indicate that another stab at cooperation on a freeze deal may be attempted in September. This is indicative of the significant pressure some of these producers are under in terms of their economies."
Morgan Stanley analysts remain unconvinced about current oil demand forecast in 1.2 -1.4 million barrels per day (bpd) range, opining that oil would in fact struggle to cap 625,000 bpd, as the physical crude market overhang has not been dealt with.
"Physical oil markets likely need to get worse before they get better," they wrote in a note to clients.
Away from oil markets, precious metals failed to fire up traders' imagination in light of a stronger dollar following a positive US jobs data report published last week. At 4:40pm BST, Comex gold futures contract for December delivery was down 0.19% or $2.60 to $1,341.80 an ounce.
FXTM research analyst Lukman Otunuga said gold was open to extreme losses during trading on Friday following the firm US employment report which heightened hopes over the Federal Reserve raising interest rates in 2016.
"This zero yielding metal remains heavily influenced by rate hike expectations and could be poised for further declines if optimism continues to grow over a probable rate hike. Although risk aversion may keep gold slightly buoyed, the combination of dollars resurgence and mounting Fed hike hopes could attract sellers to attack incessantly. Bulls still have some breathing room above $1315, but a breakdown could signal imminent danger with prices tumbling towards $1305."
Elsewhere, silver futures also tumbled lower, with the September Comex contract down 0.06% or two cents to $19.81 an ounce, thereby extending the previous session's decline. However, spot platinum was 0.53% or $6.10 higher at $1,151.95 an ounce.