By AFP Report
Oil prices
rallied on Wednesday after Kuwait said an agreement to freeze output during a
producers’ meeting this month could still be reached despite conflicting
statements by participants.
But analysts
said the rebound would not likely last owing to a painful supply glut and weak
demand caused by the slowing world economy.
Around 1130
GMT, US benchmark West Texas Intermediate for delivery in May was up $1.09 at
$36.98 a barrel.
Brent North
Sea crude for June delivery gained 86 cents to $38.73 a barrel compared with
Tuesday’s close.
Both
contracts eked out an increase on Tuesday, but prices are still below the $40
level reached last month following a rally driven by hopes of an agreement a
producers’ meeting in Doha on April 17.
Prices last
week dived after Saudi Deputy Crown Prince Mohammed bin Salman said his country
would agree to limit output only if fellow producer Iran followed suit.
But Iran,
which has been raising production since the West lifted nuclear-linked
sanctions in January, has insisted it should not be the one to cut back.
Key OPEC
member Kuwait said a freeze deal could still be reached without Tehran,
Bloomberg News reported.
It quoted
Kuwait’s OPEC governor, Nawal al-Fezaia, as saying that major producers had no
option but to reach an agreement and that a freeze could set a floor price.
Ric Spooner,
chief market analyst at CMC Markets in Sydney, said traders were likely to wait
for the results of the meeting before making big bets.
“Given the
welter of statements… people are probably just going to ignore (the comments)
until they get the results of the meeting,” Spooner told AFP.
Comments by
IMF chief Christine Lagarde — that global economic recovery is still “too slow”
and “too fragile” — further added to the gloom in the saturated oil market as
it was bad news for demand, analysts said.
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