Oil prices rally for second day

17th March 2016, Comments 0 comments

Oil prices rallied on Thursday, extending a recovery on efforts to tackle a global supply glut.

At about 1700 GMT, US benchmark West Texas Intermediate (WTI) for delivery in April was up $1.41 at $39.87 a barrel.

Brent North Sea crude for May delivery jumped $1.03 to $41.36 a barrel compared with Wednesday's close.

Phillip Futures analyst Daniel Ang doubted that the rally would last however.

"The fundamentals for oil are still weak unless OPEC or the other major oil producers do something next month" on tackling a supply glut, he told AFP.

Qatar's energy minister Mohammed al-Sada on Wednesday said that oil exporters from within and outside the OPEC cartel will meet April 17 in Doha to discuss the market situation.

The initiative is backed by 15 countries accounting for about 73 percent of worldwide output, said the minister, who also serves as president of the Organization of Petroleum Exporting Countries.

Russian Energy Minister Alexander Novak, who supports the initiative, said Iran had indicated that it is "ready to participate" in the meeting, days after Tehran had warned it would not consider any limits until it had roughly doubled production to four million barrels a day.

Other analysts have noted that the meeting is only to talk about a freeze to the current output level and not a cut in production.

Prices have rallied from near 13-year lows touched in February after Russia and Saudi Arabia mooted a meeting to freeze output.

News of the producers' meeting overshadowed a report showing a lower-than-expected build in US commercial crude inventories.

A weaker dollar after the Fed decided against an interest rate increase on Wednesday also provided support to prices as it makes the commodity cheaper for clients using other currencies.

World oil prices were recovering after sinking during the week's first two days of trading on fading hopes of a meeting between producers.

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© 2016 AFP

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