Crude prices rise further

8th March 2016, Comments 0 comments

Oil prices rose Tuesday, with Brent crude climbing above $41 a barrel, despite more disappointing data out of China.

Prices have strengthened in recent weeks largely on hopes of production freezes to ease a global supply glut.

Around 1300 GMT, US benchmark West Texas Intermediate (WTI) for delivery in April was up 28 cents at $38.18 a barrel.

Brent North Sea crude for May delivery won 56 cents to $41.40 a barrel compared with Monday's close.

Brent had closed at $40.84 a barrel in London on Monday, its highest since early December.

Daniel Ang, an analyst with Phillip Futures, said a sustained increase would be driven only if producers took concrete steps to ease the oversupply.

"Prices have to be driven from fundamental change (to supply and demand). A cut in production or a concrete freeze... could cause prices to move up further," he told AFP.

Saudi Arabia, Russia, Qatar and Venezuela last month agreed to freeze output at January levels if other producers followed suit.

United Arab Emirates' energy minister Suhail Mazrouei on Monday said he believed producers were already freezing output.

But British bank Barclays cautioned against too much optimism.

"OPEC's production freeze policy is far from certain to succeed," it said in a market commentary, referring to the Organization of the Petroleum Exporting Countries.

"The market is well aware that the countries that have so far signalled support for the policy are mostly producing at close to capacity."

Barclays added: "The big risk is that... prices fall back sharply on any lack of further progress."

Crude futures continued to grow meanwhile despite China releasing data showing another hefty slump in exports.

But mining share prices were hit hard on demand jitters because China is a leading consumer of raw materials.

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© 2016 AFP

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