Published: Sat, March 19, 2016
Economy | By Melissa Porter

Oil output freeze: OPEC meeting shifted to April

Some 15 oil-producing nations representing about 73 per cent of world output have agreed to take part, according to a statement from Qatar, which is head of OPEC.

The price of West Texas Intermediate (WTI) for April shipment increased by US$2.12 (5.8 percent) and now traded at US$38.46 per barrel on the New York Mercantile Exchange.

Saudi Oil Minister Ali al-Naimi and his Russian counterpart Alexander Novak, who represent the world's largest exporters, will discuss the meeting on Wednesday by phone, one person said.

Novak was due to call Saudi Oil Minister Ali al-Naimi on Wednesday to brief him on his trip to Tehran, two sources said.

The reluctance of Iran, which is boosting its oil exports to recover market share after the lifting of Western sanctions in January, to join such an accord has been cited by OPEC sources as a potential roadblock to a wider agreement.

Qatar holds the rotating presidency of OPEC this year and has been coordinating the effort.

Both main contracts tumbled around five percent on Monday and Tuesday, after Iran said at the weekend it would not join the talks until its production had hit 4.0 million barrels per day.

"The fundamentals for oil are still weak unless OPEC or the other major oil producers do something next month", he told AFP.

Oil prices rose on Wednesday, supported by the announcement and on growing signs of a decline in USA crude production.

The meeting "is probably the first step in many for producers to decide whether they're going to cut production later on in the year and how to accommodate Iran's return on the oil market", he said.

"Markets remain well supplied, with oil and demand growth remaining modest, leading us to believe oil prices will remain relatively low for some time", said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, who helps manage $125 billion. Delegates from four OPEC members said they hadn't yet received an invitation.

"Easy money is always good for commodities and the Fed gave oil bulls yet another excuse to push crude prices higher", said John Kilduff, partner at NY energy hedge fund Again Capital.

A plunge in oil prices since the summer of 2014 is straining the budgets of major oil producers. "We will not just meet for the sake of meeting".

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