Oil bounces to $40 as OPEC ‘settle’ output row

Crude oil prices bounced back on Thursday, continuing to gather support after the world’s biggest suppliers firmed up plans to meet to discuss an output freeze.

Oil producers including Gulf OPEC members support holding talks next month on a deal to keep production at current levels, even if Iran declines to participate, OPEC sources said on Wednesday.

A meeting would increase the likelihood of the first global supply deal in 15 years, settling output dispute between members and non-members of OPEC.

US crude was up 65 cents at 39.11 dollars a barrel at 0452 GMT, having earlier risen as high as 39.38 dollars.

Brent crude rose 38 cents to 40.71 dollars.

“A smaller than expected gain in inventories in the US also supported prices,” ANZ said in a morning note.

Crude inventories increased 1.3 million barrels in the week to March 11 to 523.2 million, a much smaller build than the 3.4 million-barrel increase expected by analysts.

The market is also rallying after a less hawkish US monetary outlook, as the US Federal Reserve held interest rates steady and indicated two rate hikes this year instead of the four expected.

Mohammed Bin Saleh Al-Sada, Qatari oil minister, said producers from within and outside the OPEC will meet in Doha on April 17 to discuss plans for a freeze in output.

The initiative was supported by around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil production, the minister said.

Since the freeze was first proposed last month, prices have recovered about 50 per cent from decade-low levels.

OPEC daily basket price stood at $34.50 a barrel on Wednesday, compared with $33.69 the previous day