Oil prices slipped from their 2016 highs yesterday after Kuwait refused to support freezing output until bigger producers pledge to coordinate. However, that disagreement took a back seat today as there are now heightened hopes that the world’s largest exports will freeze oil output.

Click Here For More Market Exclusive Updates & Analysis

Oil producers to meet

An Iraqi official revealed today that both OPEC and non-OPEC members are set to meet on March 20 to arrive at a decision over an output cut. This has led a recovery in oil prices as Brent Crude moved up sharply by 1.61% to $40.29 per barrel. West Texas Intermediate added $0.51 to $37.01.

Petromatrix Crude oil strategist Olivier Jakob said that the market is expecting balance to come in supply and demand towards the second half of the year. There has been an uptick in oil prices by roughly 25% over the last month after Saudi Arabia, Venezuela, Qatar and non-OPEC member Russia agreed to freeze production at January levels.

Decline May Exceed 2015

Prolonged weakness in oil prices has already played havoc with oil dependent companies and nations, who are struggling against the gaps in their budgets. Analysts at Bernstein underlined these concerns stating that thecut down in production has reached 60,000 barrels per day within the last two months.

Overall analysts hold the view that a fall in output in the U.S. is lending support to oil prices, but given the lacklustre demand and global oversupply, there is little hope that oil prices will succeed in locking in bigger gains.

Observing the current scenario, energy consultancy Wood Mackenzie has projected a decline in oil prices in 2016 to a level below 2015 and anticipates a recovery in 2017. The expectation is based on a large supply overhang and stockpiles during the first half of 2016.

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) posted a loss of 3.13% to $5.27 during the last trading session.