Crude oil prices are also reacting to news that U.S crude output have declined.
Advertisement
As for oil demand, the IEA trimmed its estimate for global demand growth for 2016 to 1.16 million barrels per day. Oil prices could get a huge blow if producers fail to reach any consensus on oil production.
Global oil demand will climb to 1.16 million barrels per day, a 10,000-barrel rise compared with earlier estimates, the EIA said in its monthly forecast on Tuesday.
Oil prices crashed from around $115 a barrel in June 2014 to under $30 a barrel in February, before recovering to trade above $40 a barrel this week.
A third closely watched oil report, from the International Energy Agency, is due on Thursday. OPEC’s report said that “positive market sentiments continue to arise” from the freeze plan. All eyes will now be on April 17 when major oil producers from both OPEC and non-OPEC countries will meet in Doha to discuss freezing oil production at January levels.
“Nevertheless, hurdles prevail as oversupply persists and inventories remain high”, the cartel cautioned. Russian oil minister said that an agreement on oil production scheduled on Sunday will be loosely-framed with few detailed commitments.
During a meeting in Doha on February 16, Russia, Saudi Arabia, Qatar and Venezuela agreed to freeze the oil output at the January levels if other producers followed the suit.
Non-OPEC supply growth in 2015 has been revised up slightly to stand at 1.46 mb/d to average 57.13 mb/d, according to the report.
“There are signs that the much-anticipated slide in production of light, tight oil in the U.S.is gathering pace”, the IEA wrote.
But Saudi Arabia has insisted it will not join a freeze unless Iran, which is emerging from nuclear-related Western sanctions, also does so.
Advertisement
“Investors have been burned before that OPEC (the Organization of the Petroleum Exporting Countries) will do something – the fundamentals of that thought have shown to be made of sand”, said Ben Le Brun, market analyst at Sydney’s OptionsExpress.
