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FED RATES, US STOCKS WEIGH

Oil rises 2pc after supplier meeting agreed

TOKYO, March 17, 2016

Oil futures rose 2 per cent in Asian trade on Thursday, adding to strong gains in the previous session 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, increasing the likelihood of the first global supply deal in 15 years.

US crude CLc1 was up 77 cents at $39.23 a barrel at 0221 GMT, having earlier risen as high as $39.38.

The contract settled up $2.12, or 5.8 per cent, at $38.46 a barrel on Wednesday, erasing the losses of the previous two trading days.

Brent crude LCOc1 rose 51 cents to $40.84. On Wednesday, it finished up $1.59, or 4 per cent, at $40.33 a barrel.

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

US crude oil stocks rose last week to record highs for a fifth straight week, data from the Energy Information Administration showed on Wednesday.

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.

Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside the Organization of the Petroleum Exporting Countries 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 but have been volatile without a firm meeting date.

BMI Research said the stock build suggested it may be time for a correction.

On a short-term basis (four to six weeks) the physical market looks weak, largely due to a sluggish outlook on demand," BMI said in a note.

"This weakness has been reflected in the continued and aggressive build in crude stocks, in particular in the US, but has not been reflected in recent price action," it said. – Reuters




Tags: Oil | Brent | US crude | Opec meeting |

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