Saudi Arabia and Russian Federation said Tuesday they would halt oil production increases-if major producers followed suit.
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West Texas Intermediate oil futures for March delivery ended a choppy session slightly higher.
US crude oil and gasoline inventories rose last week to new record highs as imports of crude grew and refineries increased output, data from the Energy Information Administration showed on Thursday.
“As public finances face a second year of challenging oil prices, the U.A.E. will likely issue debt and tap into its savings in order to support government spending and economic activity”, Carla Slim, the Middle East and North Africa economist at Standard Chartered in Dubai, said in an e-mail.
Both benchmarks are on track for a weekly gain of around 3% after hopes for a deal among major producers to support prices improved sentiment in the beleaguered market.
“The deal has to involve everyone and it is contingent on an agreement to do so by all parties”, said Michael Poulsen, oil analyst at Global Risk Management.
Still, Mr. Gammel, said that the deal “offers the first glimmers of optimism of OPEC action since November 2014”, when the Organization of the Petroleum Exporting Countries embarked on a course of pumping flat-out despite falling prices. In the latest session alone, Brent increased 6.72% to $34.50 per barrel while US oil 5.28% to $30.66 per barrel.
According to the EIA, last week refineries were running at 88.3 percent capacity, handling a daily average of 15.8 million barrels, which is also some 338,000 barrels a day higher than the previous week. While it has peaked at 9.7 million last April, U.S. output hasn’t fallen by as much as expected despite a more than 60% drop in rigs drilling for crude in the U.S. and cuts in capital expenditures by oil companies. “What we see still is extreme volatility”.
Gasoline futures fell 2.3% to 98.04 cents a gallon.
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Moves to curb output growth come as Saudi Arabia’s crude oil exports fell by more than 200,000 barrels per day (bpd) to nearly 7.49 million bpd in December compared with the previous month, official data showed on Thursday.
