Oil once again rose to a level near its 2016 peak as producers have aroused fresh hopes in the market by disclosing their scheduled meet next month to discuss strategies that could support oil prices.
Producers fix meet
During early European trading hours, Brent Crude surged to a level above $41, representing a rise of 1.83%. West Texas Intermediate gained as much as 2.16% to $39.29. Both OPEC and non-OPEC producers have scheduled a meet on April 17 in Qatar to discuss the proposal of holding production levels to support prices.
Commenting on the present scenario, Olivier Jakob, oil analyst at Petromatrix, said that oil prices are well supported at current levels while weakness in the U.S. dollar is also helping dollar-denominated oil.
U.S. inventories rose at a slower pace
The April meet will follow the initial deal that took place in February, which was stuck between Qatar, Saudi Arabia, Venezuela and non-OPEC member Russia. The four oil producers had formally agreed to maintain production levels at January levels to contain the price plunge in oil, which fell from $100 to sub-$30 levels in the last one and a half years.
An analyst from PVM, Tamas Varga, called the initiative by the 15 oil exporting nations an encouraging move but maintains doubts over the success of the meet in supporting oil prices. He is unsure if freezing output at January levels will bring tangible change or not.
At the same time, a slower than expected rise in U.S. crude stocks has also lifted sentiment around oil prices. However, the U.S. Energy Information Administration said that crude reserves are still at record highs. Apart from this, the International Energy Agency (IEA) has also expressed hopes that oil prices have bottomed out.
iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) rose by 4% to $5.46 during the previous trading session.