Hong Kong - Brent oil rose as Russia said talks on an output freeze will be done by March 1, while Nigeria said some countries should have production capped at higher levels.
Futures rose as much as 1.9% in London, paring a two-day, 4.3% slide. Iran was “constructive” on the deal struck last week to cap output, although it hasn’t said whether it may join the pact, Russian Energy Minister Alexander Novak told state TV on Saturday.
While Nigeria backs the plan, Iraq and Iran should be allowed to recover lost market share, Minister of State for Petroleum Resources Emmanuel Kachikwu said Sunday.
“Even if the proposal is agreed, it’s unlikely to have much difference to the balance of the oil market in the near term,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Prices also face the relentless weight of growing inventories, which are getting larger.”
Crude is still down about 10% this year on speculation a worldwide surplus will persist amid the outlook for increased exports from Iran after the removal of international sanctions and brimming US stockpiles. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha last week to freeze output at January levels if other states join them.
Brent for April settlement rose as much as 62 cents to $33.63 a barrel on the London-based ICE Futures Europe exchange and was at $33.47 at 07:31. Prices slid 1.1% last week for a third weekly decline. The European benchmark crude was at a premium of $1.11 to West Texas Intermediate for April.
WTI for March delivery, which expires Monday, climbed as much as 58c to $30.22 a barrel on the New York Mercantile Exchange. Prices advanced 0.7% last week. Total volume traded was about 17% above the 100-day average. The more- active April future was 61c higher at $32.36 a barrel.
Speculators’ long positions in WTI futures and options fell by 5.3% during the week ended February 16, according to US Commodity Futures Trading Commission data, the biggest decline in seven months. Longs slid by 16 146 contracts to 286 238.
The output pact also includes Qatar and Venezuela and is the “beginning of a process” that could require “other steps to stabilize and improve the market,” Saudi Oil Minister Ali al- Naimi said after the talks. The kingdom pumped 10.2 million barrels last month, according to data compiled by Bloomberg. Russia produced 10.9 million, a post-Soviet record.
Rigs targeting oil in the US fell by 26 to 413, the lowest number of active machines since December 2009, according to Baker Hughes. That’s the ninth straight week of declines. The nation’s stockpiles have swelled to more than 500 million barrels, the highest level since 1930 in monthly Energy Information Administration data going back to 1920.