Oil prices rise as producers agree to April meet in Doha

Date

3/17/2016 1:21:03 PM

(MENAFN- The Peninsula)

London: Oil prices rebounded yesterday as Qatar said producers from within and outside Opec would meet next month to discuss a freezing of output.

Crude futures won support also from official data showing a smaller-than-expected rise in US crude stockpiles.

“The price of oil has rebounded... thanks to a smaller-than-expected US oil inventory build and a meeting between major oil producers excluding Iran scheduled for next month that could see an output freeze” noted CMC Markets analyst Jasper Lawler.

Prices had been falling heavily prior to the announcement after Iran said at the weekend it would not join talks originally set for March 20 until its production had hit 4 million barrels per day.

The meeting proposed by the world’s top two producers non-Opec nation Russia and Opec kingpin Saudi Arabia has now been pushed back to April 17.

At about 1700 GMT US benchmark West Texas Intermediate for delivery in April was up $1.47 at $37.81 a barrel.

Brent North Sea crude for May delivery won $1.10 to $39.84 a barrel compared with Tuesday’s close.

Also official data revealed that US stockpiles of commercial crude grew by 1.3 million barrels last week far lower than the 3.2-million build expected by markets.

“The early stages of global oil rebalancing which requires US crude oil production to decline significantly have begun and will continue as long as WTI prices remain sufficiently low that US shale oil producers are forced to continue reducing output” French bank Societe Generale said.

The world is awash with oil as Opec members seek to maintain market share faced with competition from producers extracting oil from North American shale rock.

Markets were meanwhile awaiting the conclusion of the Federal Reserve’s latest policy meeting to see if it provides guidance on its plans for interest rates.

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