Oil rises as producers announce meeting on output freeze
Oil prices firmed on Wednesday on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in US crude production
London: Oil prices firmed on Wednesday on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in US crude production.
Producers both from and outside the Organization of the Petroleum Exporting Countries will hold talks in the capital Doha on April 17, Qatari oil minister Mohammed Bin Saleh Al-Sada said.
Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the initiative, the minister said in a statement.
Brent crude futures were up 78 cents at $39.52 a barrel at 1140 GMT.
U.S. crude futures were trading 79 cents a barrel higher at $37.13.
Saudi Arabia, Qatar and Venezuela along with non-OPEC member Russia agreed last month to freeze output at January levels, but Iran has rejected such a deal.
On Monday, Russian Energy Minister Alexander Novak said a deal could be signed excluding Iran, which he said has the right to boost oil output after years of sanctions.
Kuwait plans to take part in the meeting, acting oil minister Anas al-Saleh said on Wednesday.
Analysts, however, said talks about freezing output would do little to rein in a global glut that sees more than 1 million barrels of crude produced every day in excess of demand.
"Any such deal would still not be a game changer. It would really just maintain the excess supply that is now in place," Thomas Pugh of Capital Economics said in a note.
But Standard Chartered said supply concerns due to non-OPEC production cuts could drive prices above $60 a barrel by the end of the year.
"We think that in coming months supply-side concerns will dominate, particularly when global inventories start to fall, which we think will happen in the third quarter," the bank said in a note.
U.S. shale producer Linn Energy said on Tuesday that bankruptcy may be unavoidable as the company missed interest payments amid a slump in oil prices of as much as 70 percent since mid-2014.
Other companies, also fighting for survival, are seeking risky and costly borrowing from private equity firms.
The market is also eyeing crude inventory data from the U.S. Energy Information Administration due later on Wednesday. The numbers are expected to show a rise of 3.4 million barrels last week, a Reuters poll of eight analysts showed.