There is speculation that the Doha summit to discuss the oil glut could yield a production freeze for OPEC members and Russia [Xinhua]
Oil prices continued to rally on Tuesday on hopes that a summit of the Organization of the Petroleum Exporting Countries (OPEC) and Russia could yield an agreement to curb output quotas.
US benchmark West Texas Intermediate crude was up 4.38 per cent at press time to $30.73.
International benchmark Brent Crude for April delivery was up 4.07 per cent to $34.07 ahead of trading opening in London.
The rally comes as Doha, Qatar hosts a summit between OPEC and Russia, today.
Last week, Venezuelan Oil Minister Eulogio Del Pino embarked on an ambitious mission to meet with OPEC heavyweights and Russia to drum up support for an emergency meeting to curb oil production.
While he received support for a summit from Iran and Russia, the Saudis at the time appear to have balked.
Saudi Arabian Oil Minister Ali al-Naimi al Saud his talks with Del Pino in Riyadh were successful, but made no mention of a summit.
The uncertainty about the summit last week sent oil prices down to $26 a barrel as overstock fears persisted.
With OPEC’s removal of output caps in January, the oil cartel is now selling 32.5 to 33.5 million barrels of oil a day – well above market demand.
According to the International Energy Agency, Saudi Arabia produced at least 10.2 million barrels a day in January. By comparison, Venezuela pumped into global markets only 2.5 million barrels a day.
Russia, meanwhile, injected into the markets nearly 11 million barrels a day. The Saudis had previously indicated they wanted Russia to first commit to curbing production before any summit could be held. Not surprisingly, the Russians have declined that offer.
Analysts speculate that OPEC and Russia could agree to a production freeze – not to pump more than their current levels.
The BRICS Post with inputs from Agencies
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