March 4, 2016 8:38 pm
SINGAPORE: Oil prices
rose in Asia on Friday after Nigeria said key crude producers plan to meet in
Russia later this month to discuss a proposed output freeze.
The pick-up follows a
week of gains for the battered commodity, which in January was wallowing near
13-year lows below $30 a barrel owing to overproduction, a supply glut and a
slowdown in the global economy.
Nigerian oil minister
Emmanuel Ibe Kachikwu said Thursday that the meeting will be held on March 20
and predicted there will be a “dramatic price movement,” Bloomberg News
reported.
At about 6:15 a.m.
local time, US benchmark West Texas Intermediate for April delivery was 31
cents higher at $34.88 a barrel. Brent for May rose 33 cents to $37.40 a
barrel.
Both have gained about $2 since last week.
Both have gained about $2 since last week.
Crude has picked up
recently following speculation over plans by major oil producers including
Organization of the Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia
to cap output.
Market strategist
Bernard Aw from IG Markets Singapore told Agence France-Presse that for the
potential meeting between OPEC members and Russia to bear fruit, the major
producers have to be present.
“If the big players
such as Saudi Arabia, Iran, Iraq, agree to freeze output, it could help
somewhat. But, the fundamentals of the market remain largely unchanged, it is
still quite oversupplied.
“Maybe in the short
term it will help development in the oil market, we could see a return to maybe
$40,” Aw said.
Another boost to the
hammered commodity was US Energy Information Administration data released
Thursday showing oil production falling to just over nine million barrels a day
in the week to February 26.
“There were a series
of positive developments in the oil market . . . If this keeps up, then I think
we will see a more sustainable rebound in oil markets, at least for the near
term,” Aw added.
Oil is still down
about 6 percent this year on speculation a global glut will be prolonged amid
brimming US stockpiles and the outlook for increased exports from Iran after the
removal of sanctions, Bloomberg reported.
Saudi Arabia, Russia,
Qatar and Venezuela agreed on February 16 in Doha that they would freeze output
if other producers followed suit in an effort to tackle the oversupply problem.
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