Oil Trades Near Four-Month High as US Declines, Iraq Ramps Up
Oil traded near a four-month high in London, swinging between gains and losses as Iraq said it raised output to a record in March while U.S. production fell.
Brent futures advanced 0.6%, erasing an earlier loss of 1.3%. Iraq, OPEC’s second-biggest producer, increased output 2% and exports by 18% last month, according to the state-run Oil Marketing Co. U.S. production slid for the 10th time in 11 weeks through April 1, while crude stockpiles fell, according to data from the Energy Information Administration.
Oil has rebounded after falling to the lowest level in more than 12 years amid signs that a global glut will ease as U.S. output declines. Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, said it will agree to a freeze only if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support.
“There are clearly increased hopes again that the meeting of oil producers in Doha will produce a substantial result,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said in a report. “We are skeptical about this. There is thus a risk of a price correction if the market is disappointed by the outcome of the meeting.”
Brent for June settlement advanced 24 cents, or 0.6%, to $42.18 a barrel on the London-based ICE Futures Europe exchange. Prices increased 8.5% last week. The global benchmark crude was at a 94 cent premium to WTI for June.
West Texas Intermediate for May delivery gained 31 cents to $40.03 a barrel on the New York Mercantile Exchange, erasing an earlier loss of 1.2%. The contract rose $2.46 to $39.72 on April 8, the biggest increase since Feb. 12, to cap an 8% weekly gain. Total volume traded Monday was about 23% above the 100-day average.
The number of active rigs targeting oil in the U.S. fell for the 15th time in 16 weeks, dropping by eight to 354, Baker Hughes Inc. said on its website on Friday, April 9. Drillers have idled more than 180 machines this year.
Venezuela said the first priority of global suppliers meeting April 17 in Doha should be to cap production, while Azerbaijan gave its backing to the freeze.
Other news:
• Iraq’s output rose to 4.55 million barrels a day in March from 4.46 million in February. Exports increased to 3.81 million barrels a day from 3.23 million.
• Colombia, while expecting to attend the meeting in Doha, doesn’t support the introduction of oil output quotas, Energy Minister Maria Gutierrez said in Quito.
• Azerbaijan supports the idea of freezing crude output at January levels and Energy Minister Natiq Aliyev will attend the Doha meeting, the Energy Ministry said by e-mail.
• Short positions in WTI crude jumped 35% in the week ended April 5, according to the U.S. Commodity Futures Trading Commission. Bullish bets on Brent crude declined for a second week.
• TransCanada Corp. restarted the Keystone oil pipeline early Sunday, according to spokesman Mark Cooper.
