Oil prices rise in thin holiday trad­ing

The Pak Banker - - MARKETS/SPORTS -

Oil prices firmed in thin Easter holiday trad­ing on Mon­day, adding to gains in re­cent weeks as op­ti­mism holds that a pro­duc­tion freeze among ma­jor pro­duc­ers may be im­ple­mented. Brent crude futures were up 25 cents at $40.69 per bar­rel at 0916 GMT. Last week, the con­tract fell 76 cents, or nearly 2 per­cent, in its first de­cline in five weeks.

U.S. crude's front-month con­tract was up 34 cents at $39.80 a bar­rel. Oil prices have risen about 50 per­cent from multi-year lows hit in Jan­uary on glut wor­ries. Prices have been sup­ported by dis­rup­tions to oil sup­plies in Nige­ria and Iraq and plans by ma­jor pro­duc­ers to freeze their out­put at Jan­uary lev­els.

Mem­bers and non-mem­bers from the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) are due to meet in the Qatari cap­i­tal Doha on April 17 to dis­cuss the plan.

"There is go­ing to be pres­sure on the par­tic­i­pants in the meet­ing to en­sure they achieve some­thing. Oth­er­wise they risk the sup­port-mar­ket sen­ti­ment that we are see­ing now dis­si­pate rapidly," said Vic­tor Shum, se­nior oil and gas an­a­lyst at IHS in Sin­ga­pore. So far, 10 coun­tries have con­firmed their at­ten­dance at the meet­ing, with only OPECmem­ber Libya say­ing it will not at­tend. De­clin­ing U.S. oil out­put and strong U.S. gaso­line de­mand have also sup­ported oil prices.

In­vestors will be look­ing out for monthly U.S. pro­duc­tion fig­ures for Jan­uary to be re­leased this week as a barom­e­ter for the re­silience of shale pro­duc­ers.

U.S. crude oil pro­duc­tion fell for a third month in De­cem­ber to 9.26 mil­lion bar­rels per day due to de­clines in the big­gest shale-pro­duc­ing states, al­though the fall was off­set by a rise off­shore, ac­cord­ing to the U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA). The EIA said this month that U.S. shale oil pro­duc­tion in April is ex­pected to record its sec­ond­largest monthly de­cline on record at around 106,000 bar­rels per day (bpd).

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