Oil prices rise on talk of Russia meeting

SINGAPORE: Oil prices rose in Asia yesterday 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 US$ 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 around 0400 GMT, US benchmark West Texas Intermediate for April delivery was 24 cents higher at US$ 34.81 a barrel. Brent for May rose 11 cents to US$ 37.18 a barrel.

Both have gained about US$ 2 since last week.

Crude has picked up recently following speculation over plans by major oil producers including OPEC kingpin Saudi Arabia to cap output.

Market strategist Bernard Aw from IG Markets Singapore told AFP 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 US$ 40,” Aw said. — AFP