Oil prices rise at end of volatile week

Oil barrel.

Oil barrel.

Oil prices rose Friday, with Brent reaching a near two-month high, on hopes of a deal among producers to tackle a global supply glut.

The pick-up in prices this week comes after crude wallowed near 13-year lows below $30 a barrel in January, also owing to a strong dollar and tepid demand growth.

Brent North Sea crude reached $37.40 a barrel Friday — the highest level since January 5.

US benchmark West Texas Intermediate hit a near two-month high of $35.32 on Thursday.

“Both oil types have gained by more than five percent in the past five days of trading,” noted Commerzbank analyst Carsten Fritsch.

“The price rise was boosted by reports of declining supply” from OPEC (Organization of Petroleum Exporting Countries) and the United States.

“What is more, efforts are ongoing to persuade other countries to cap their oil production, as Saudi Arabia, Russia, Venezuela and Qatar agreed to do in mid-February.”

Nigeria on Thursday said key crude producers plan to meet this month in Russia to discuss a proposed output freeze.

Nigerian oil minister Emmanuel Ibe Kachikwu predicted there would be a “dramatic price movement” after the March 20 gathering, Bloomberg News reported.

Crude has picked up recently following speculation over plans by major oil producers including OPEC kingpin Saudi Arabia to cap output. Nigeria is also a part of the cartel, while major oil producers Russia and the US sit outside OPEC.

“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,” strategist Bernard Aw at IG Markets Singapore told AFP.

“Maybe in the short term… we could see a return to maybe $40,” Aw said.

Concerns about the oversupplied market were eased this week as US government data showed oil production falling to around nine million barrels per day.

At about 1230 GMT, US benchmark West Texas Intermediate for delivery in April was trading up seven cents at $34.64 a barrel.

Brent North Sea crude for May rose 28 cents to $37.35 a barrel compared with Thursday’s close.

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