Oil prices remained steady as the trading week opened following their three-day long losing steak last week. The factor feeding the ambivalence may be strong hopes that oil producers may impose an output freeze soon. Even if not practically changing the supply and demand picture, the move could still spark confidence in the oil market. However, volume remained weak as most markets observed a holiday on account of Easter Monday.
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Brent Crude jumped 0.84% to $40.78 during today’s trade before falling back to $40 even while West Texas Intermediate gained as much as 1.09% to $39.89 during the late Asian hours before falling back to $39.20. It is to be noted that oil prices have jumped 50% until now after they hit multi-year lows in January following concerns of major oversupply.
However, the unfavorable situation emerging in Nigeria and Iraq alongside progressing talks among producers to freeze output has helped oil prices to rebound slightly. OPEC and non-OPEC members are set to meet at Doha on April 17 to discuss their move in supporting oil prices, if any.
OPEC meeting crucial
Victor Shum, senior oil and gas analyst at IHS, has warned that oil producers should be able to reach some agreement, which otherwise could start a free fall in oil prices. Except for OPEC member Libya, other members have already confirmed their willingness to attend the meeting.
Meanwhile, the decline in the U.S. rig count and strong gasoline demand is also lending some support to oil prices. However, market participants will remain tuned to the U.S. production figures for January, which are due to be released this week and will guide about the production levels at shale fields.
Oil production in the U.S. reported a fall for the third consecutive month in December to 9.26 million barrels per day. However, such a fall was more or less offset by an increase in offshore production, according to the report published by the U.S. Energy Information Administration (EIA).
The iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) is trading down 1.3% to $5.23 as of this morning.