Oil nations now to meet in Qatar in April

Oil nations now to meet in Qatar in April

Wednesday, March 16, 2016 10:29 am

Dr. Mohammed Bin Saleh Al-Sada: Qatar energy minister

Dr. Mohammed Bin Saleh Al-Sada: Qatar energy minister

A select meeting of OPEC members and Russia to discuss output freeze, will not be taking place in Russia this weekend.

Instead, the meeting has been shifted to Qatar, where exploratory talks began in February.

According to Reuters, the meeting will hold on 17 April.

News about the meeting, that will exclude Iran impacted on oil prices in Asia. There was also the expectations of U.S. production declines, but analysts warned that neither the freeze nor the declines point to the end of a global supply glut.

U.S. crude futures CLc1 were trading at $36.64 per barrel at 0756 GMT, up 30 cents from their last settlement.

Brent LCOc1 was up 11 cents at $38.85 a barrel.

Oil rose after prices dropped about 2 percent the previous session.

Producers are considering pegging output at January levels, when both Saudi Arabia and Russia were both producing near record levels of over 10 million barrels per day (bpd).

Iran’s production, however, was still low due to sanctions that cut its output to little over 1 million bpd, and Tehran has said that it would only participate once its production hits 4 million bpd from a current 3 million bpd.

Analysts said that talks about freezing output would do little to rein in a global glut that sees over 1 million barrels of crude produced every day in excess of demand.

“Any such deal would still not be a game changer. It would really just maintain the excess supply that is now in place,” Thomas Pugh of Capital Economics said in a note.

Prices also received support from expectations of lower U.S. production resulting from financial distress.

“For today, we may see some strength for prices coming from possible U.S. production declines,” said Singapore-based brokerage Phillip Futures.

U.S. shale producer Linn Energy (LINE.O) said on Tuesday that bankruptcy may be unavoidable as the company missed interest payments amid a slump in oil prices of as much as 70 percent since mid-2014.

Other companies, also fighting for survival, are seeking risky and costly borrowing from private equity firms.

Traders said that Wednesday’s focus would shift to the U.S. where official production and inventory data will be released later in the day.

That data is expected to show crude inventories rose to a record for a fifth straight week.

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