Oil Prices Rebound Sharply
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By Friday, US benchmark West Texas Intermediate (WTI) for delivery in April stood at $34.24 a barrel compared with $29.96 for the expired March contract one week earlier.
“Both contracts have been supported first and foremost by a general improvement in risk sentiment, with equities also bouncing back buoyantly in recent days.
“More specific to oil, signs of a noticeable crude output decline in the US and on-going talks about an oil production freeze between some OPEC and non-OPEC countries are both helping to provide support, at least for the time being,” he added.
Crude futures won a late lift from official data showing that the US economy grew at an annual rate of 1.0 percent in the fourth quarter, far stronger than expected.
– Output talks? –
Oil prices had already risen strongly on Thursday after Venezuelan oil minister Eulogio Del Pino said his country was preparing to meet other producers in March to discuss ways to stabilise the market.
Prices were higher “due to speculation that there would be some kind of agreement between the major oil producers to freeze production”, IG market strategist Bernard Aw told AFP, adding that he doubted anything would materialise.
OPEC heavyweight Saudi Arabia, along with Venezuela, Qatar and non-OPEC producer Russia, last week announced a preliminary deal to freeze output at January levels, but only if other major producers followed suit.
But Iran has reacted coldly to the plan and is ramping up production after nuclear-linked Western economic sanctions were recently lifted.
“It’s the first time the gasoline storage has been down in 15 weeks,” said Bob Yawger of Mizuho Securities.
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