Source : Investing.com
Crude oil prices continued strong gains in Asia on
Tuesday as elements come together to at least consider a cut in crude
output by major producers.
On the New York Mercantile Exchange, crude oil for delivery in March jumped 4.81% to $30.86 a barrel. Brent was last quoted at $34.73 a barrel, up 4.03%.
This week, the American Petroleum Institute and U.S. Department of Energy
estimates of crude and refined stockpiles in the U.S. are likely to be
delayed by a day each because of a federal holiday on Monday.
Overnight, oil prices were steady on Monday, holding on to last
week's gains on speculation that OPEC might agree to cut production to
reduce a supply glut that has pushed prices to the lowest in over a
decade.
"Some traders still think about the chances of an OPEC plus Russia
(production) cut and close their short positions," said Frank Klumpp,
oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
Nigeria's oil minister told Reuters the mood inside OPEC was shifting
to a growing consensus that a decision must be reached on how to prop
up prices.
Non-OPEC member Russia said on Monday it was in talks on coordinated
output cuts with individual OPEC members, mainly Venezuela, but not with
the organization itself, news agency Interfax quoted Russia's
representative to OPEC as saying.
Last week, the United Arab Emirates' energy minister said OPEC was
willing to cooperate on an output cut, the Wall Street Journal reported
last week.
"The fact that the market has reacted so strongly certainly indicates
that these comments are being taken seriously," analysts at
Frankfurt-based Commerzbank (DE:DE:DE:CBKG)
wrote. However, many analysts, including the International Energy
Agency, are still skeptical OPEC will cut a deal with other producers to
reign in ballooning output.
"We continue to believe that if prices were to be artificially
supported with production cuts it would only give more expensive forms
of production more room to breathe and would only solve the problem in
the short term," Phillip Futures said in a note.
Iran is exporting 1.3 million barrels per day (bpd) of crude, and
will be pumping 1.5 million bpd by the start of the next Iranian year on
March 20, a vice president was quoted as saying on Saturday.
Iran would load 4 million barrels of crude on tankers destined for
Europe in the coming 24 hours, a senior official was quoted as saying.
Ben van Beurden, chief executive of oil company Shell (L:L:L:RDSa), said on Monday that volatility in oil prices may stabilize later this year and that prices could rebound after that.
