Reuters technical analyst Wang Tao said that U.S. crude prices ended a multi-year downtrend this week and that WTI prices would target prices above $40 per barrel in March.
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A Russian energy official on Tuesday disclosed that a “critical mass” of oil-producing nations had reached a deal to halt oil production, and that a final decision on such an agrrement would be carried out in the next few weeks, state news agency TASS reported.
“Today’s EIA data will do very little to help oil’s recent bounce”, said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. “By announcing a production freeze, the global oil coalition has set a floor under oil prices”.
Brent crude oil prices rose US$ 1.55 per barrel to US$ 33.53 per barrel, while the OPEC Basket price upped a slightly higher US$ 2.15 per barrel to US$ 28.65 per barrel.
USA crude futures CLc1 slipped 9 cents to $34.57, against an intraday peak at $35.32.
However, the market shrugged off the bigger-than-expected growth and honed in on the decline in production, which fell for the sixth week to 9.08 million barrels a day, and the drawdown in gasoline stocks, which fell by 1.5 million barrels, suggesting healthy demand.
Non-OPEC supply is forecast to fall by 850,000 barrels a day this year, of which 760,000 barrels will be cut from USA production. Saudi Arabia, Venezuela, Qatar and Russian Federation agreed in February to cap their output at January levels, assuming other countries cooperate.
On February 11, after, it crashed at thirteen years lows at $26.05, U.
USA government data on Wednesday had already reported Cushing stockpiles at record highs of 66.3 million barrels last week.
USA shale oil producers are readjusting their standards in the face of continued low oil prices.
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Monday’s strong start for crude oil prices followed weekend legislative elections in Iran that brought several reform-minded allies of President Hassan Rouhani into the fold. “I don’t think a freeze is the solution”, Natixis commodities strategist Abhishek Deshpande said. “Overall (U.S. oil) consumption rose to 19.4 million barrels per day (bpd) in 2015 (up by 290,000 bpd year-on-year), marking the highest annual rate of consumption since 2008”, Barclays bank said on Tuesday. This, combined with a possible production freeze by OPEC and Non-OPEC producers could eventually lead to a reduction in supply.
