Oil Price Jumps on Pos­si­ble Opec Deal to Freeze Out­put

Rus­sia Sees Oil at $50 ‘Ac­cept­able’

The Economic Times - - Commodities Plus -

Matthew Nitch Smith

New York Oil prices jumped on Tues­day night af­ter an aw­ful start to the month.

Prices plunged last week af­ter Saudi Ara­bia’s Prince Mo­ham­mad bin Sal­man hinted that the coun­try would only par­tic­i­pate in out­put freezes if Iran also played ball. But now OPEC is hint­ing that an agree­ment on a freeze can be reached whether Iran agrees or not.

The Kuwaiti gover­nor for the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC), Nawal Al-Fuzaia, said there were “pos­i­tive in­di­ca­tions an agree­ment (on a price freeze) will be reached,” ac­cord­ing to Reuters.

This was ap­par­ently enough op­ti­mism for oil in­vestors, and both West Texas In­ter­me­di­ate (WTI) crude oil and Brent oil rose on the an­nounce­ment. Ma­jor oil pro­duc­ers are due to meet in Qatar on April 17 to dis­cuss curb­ing out­put. How­ever Iran has said that it still ex­pects its pro­duc­tion to reach four mil­lion bar­rels a day by this time next year. An­a­lysts warned that in­vestors should still pay at­ten­tion to Iran re­gard­less of its in­volve­ment in out­put freeze agree­ments: “Kuwait seems to think that a pro­duc­tion freeze deal is pos­si­ble even with­out Iran,” Tim Evans, en­ergy futures spe­cial­ist at Citi Futures, told MSNBC. “We also think it would be in­ef­fec­tive in bend­ing the path of fu­ture pro­duc­tion, leav­ing the ex­pected global sur­plus in place.”

— Busi­ness In­sider Rus­sia be­lieves that oil price at $45-$50 per bar­rel is ac­cept­able to al­low the global oil mar­ket to bal­ance, as it pre­pares to meet lead­ing oil pro­duc­ers in Doha this month, sources familiar with Rus­sian plans said on Wed­nes­day. Oil pro­duc­ers plan to meet in Doha on April 17.

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