- Kuwait says oil producers must reach agreememt on April 17
- Crude supply forecast to gain by 2.85 million barrels: Survey
Oil advanced on speculation a pact to freeze crude output may be reached without the participation of Iran.
Futures rose from a one-month low. Oil-producing countries can come to an agreement capping crude production at January levels even if Iran doesn’t join the move to help shore up prices, according to Kuwait’s OPEC governor. The dollar dropped to the lowest level against the yen in more than a year, bolstering the appeal of commodities priced in the U.S. currency. A government report Wednesday is projected to show that U.S. crude supplies climbed.
West Texas Intermediate for May delivery increased 19 cents, or 0.5 percent, to settle at $35.89 a barrel on the New York Mercantile Exchange. Futures touched $35.24, the lowest since March 4. Total volume traded was 19 percent below the 100-day average.
Futures extended gains after the settlement when the American Petroleum Institute was said to report U.S. crude supplies dropped 4.32 million barrels last week. WTI traded at $36.45 at 4:39 p.m.
Brent for June settlement rose 18 cents, or 0.5 percent, to $37.87 a barrel on the London-based ICE Futures Europe exchange. It earlier touched $37.27, also the lowest since March 4.
"The market has been under tremendous selling pressure," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. "We’ve been watching the wheels come off of the plans for a freeze at the April 17 meeting. We’ll probably get another inventory build as well."
Oil’s rebound from a 12-year low has stalled amid doubts about the prospects of a proposed deal to freeze supply. Saudi Arabia will only cap production if it’s joined by other major producers including Iran, the kingdom’s deputy crown prince said last week. Russia and all OPEC members except Libya will attend the meeting in Doha.
The Organization of Petroleum Exporting Countries and other producers have no option but to reach an agreement to freeze output at the meeting in Doha, because prices are too low, Nawal al-Fezaia, Kuwait’s OPEC governor, said in a telephone interview.
Iranian Oil Minister Bijan Namdar Zanganeh said he will attend the summit if he finds time, according to the country’s semi-official Mehr news agency. The nation has refused any limits on crude supply as it restores oil exports after international sanctions were lifted in January.
"There’s a growing realization that all of these statements are pre-meeting positioning," said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. "I wouldn’t read too much into them. It looks like the meeting will take place, and if it occurs there’s a good chance an agreement will be reached."
U.S. crude supplies rose by 2.85 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. That gain would leave stockpiles at the highest level in more than eight decades. Gasoline stockpiles probably fell by 1.1 million barrels last week, according to the survey.
Gasoline demand, Saudi pricing and output freeze news:
- U.S. demand for finished gasoline in January fell to 8.7 million barrels a day, the first year-on-year decline since November 2014, according to data from the EIA’s Petroleum Supply Monthly report. Distillate fuel demand had the biggest year-on-year decline since October 2009.
- Saudi Arabia raises U.S. crude pricing ahead of driving season.
- Russia may discuss with Saudi officials the kingdom’s statement made last week that it will only freeze output if Iran and others do so, Russian Energy Minister Alexander Novak said.