‘The fundamentals for oil are still weak unless OPEC or the other major oil producers do something next month, ‘ he told AFP.
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West Texas Intermediate, the US benchmark price for crude oil, gained 1.4 percent to start the day in NY at $36.87 per barrel.
Market intelligence firm Genscape reported an inventory build of 585,854 barrels in Cushing, Oklahoma, taking the delivery hub for USA crude futures closer to capacity, traders who saw the data said.
The evolving position emerged after Qatar said Wednesday that it would host a meeting on April 17 in Doha for oil producers both inside and outside the Organization of the Petroleum Exporting Countries, the cartel that controls a third of the world’s crude production. To date, around 15 OPEC and non-OPEC producers, accounting for about 73% of Global Oil output, support this initiative.
Andy Lipow, head of Houston energy consultancy Lipow Oil Associates, said the market gave more weight to the Qatar announcement than to news that USA oil inventories remain lofty.
Oil producers probably will meet in April to discuss freezing output at January levels, Novak said, according to news reports.
Oil prices fell Monday on renewed doubts that OPEC will engineer an output freeze amid the global oversupply, with Iran signaling it was not ready to commit any time soon.
US crude was up 77 cents at $39.23 a barrel at 0221 GMT, having earlier risen as high as $39.38.
Novak, in turn, said that Iran has the right to be exempted from crude output cuts to stabilize the market with an aim to remedy the losses inflicted on its economy from global sanctions.
“Recent Iranian statements make it crystal clear to the market that they aren’t about to freeze production”, said Mike Wittner, head of oil markets at Societe Generale SA in NY.
USA shale producer Linn Energy (LINE.O) 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.
United States crude was down $1.13 at $37.37 a barrel.
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In order to tackle the supply glut, Saudi Arabia and Russian Federation along with Qatar and Venezuela have put in a proposal that major oil producers should freeze output at January levels. “This is most likely to be a resolution or a joint declaration setting forth intentions of the parties to freeze oil production at the level not higher than in January 2016”, Novak added.
