Oil Price Rises As Producers Plan To Meet In Russia

Oil prices rose in Asia today after Nigeria said key crude producers plan to meet in Russia later this month to discuss a proposed output freeze.

The pick-up follows a week of gains for the battered commodity, which in January was wallowing near 13-year lows below $30 a barrel owing to overproduction, a supply glut and a slowdown in the global economy.

Nigerian oil minister Emmanuel Ibe Kachikwu said that the meeting will be held on March 20 and predicted there will be a “dramatic price movement”, Bloomberg News reported.

US benchmark West Texas Intermediate for April delivery was 31 cents higher at $34.88 a barrel. Brent for May rose 33 cents to $37.40 a barrel. Both have gained about $2 since last week.

Crude has picked up recently following speculation over plans by major oil producers including OPEC kingpin Saudi Arabia to cap output.

Analysts said that for the potential meeting between OPEC members and Russia to bear fruit, the major producers have to be present.

Another boost to the hammered commodity was US Energy Information Administration (EIA) data released yesterday showing oil production falling to just over nine million barrels per day in the week to February 26.

Oil is still down about 6% this year on speculation a global glut will be prolonged amid brimming US stockpiles and the outlook for increased exports from Iran after the removal of sanctions, Bloomberg reported.

Saudi Arabia, Russia, Qatar and Venezuela agreed on February 16 in Doha that they would freeze output if other producers followed suit in an effort to tackle the oversupply problem.