Source : Investing.com - Crude oil prices rebounded mildly in Asia on
Wednesday after an overnight drop based on lukewarm sentiment for a
potential output freeze.
On the New York Mercantile Exchange, WTI crude for March delivery
rose 0.57% to $29.20 a barrel. Brent oil gained 1.09% to $32.53 a barrel
The American Petroleum Institute
is expected to provide estimates of crude oil and refined product
stocks last week, followed on Thursday by more closely-watched figures
from the U.S. Department of Energy. The data was delayed by a day because of a federal holiday on Monday in the U.S.
In the U.S., crude stockpiles at the Cushing Oil Hub in Oklahoma,
rose by 705,000 for the week ending on Feb. 12, according to global data
provider Genscape, Inc. Inventories at Cushing, the main delivery point
of Nymex oil, are approaching near 90% of full storage capacity.
Overnight, U.S. crude
pared sharp gains on Tuesday, after investors expressed intense
skepticism that a Saudi Arabian-Russian brokered deal aimed at freezing
production at its current levels could be completed without the
cooperation of Iran.
On the Intercontinental Exchange, Brent crude
for April delivery traded in a broad range between $31.93 and $35.54 a
barrel, before closing at $32.76, down 1.25 or 3.73% on the session. At
one point on Tuesday, North Sea brent futures sprung to near three-week
highs reached at the start of the month, following a four-day winning
streak to cap January. Brent still settled at its lowest closing level
in four sessions, following a late sell-off.
Both the international and U.S. benchmarks of crude are down more
than 70% over the last 15 months since OPEC rattled global energy
markets in November, 2014, with a strategic decision to leave its
production ceiling above 30 million barrels per day. As a result oil
markets have been awash in excessive supply, pushing crude prices to
levels not seen since the early-2000s.
In Doha, the four producers agreed in principle on an accord to
freeze output at its January levels, representing the first time OPEC
and Non-OPEC states have reached a deal in 15 years. Last month, Saudi
Arabia, the world's top exporter pumped 10.2 million barrels of crude
per day, just below its June peak of 10.5 million bpd.
"The reason we agreed to a potential freeze of production is simple:
it is the beginning of a process which we will assess in the next few
months and decide if we need other steps to stabilize and improve the
market," Saudi Arabia energy minister Ali al-Naimi told reporters on
Tuesday.
"We don't want significant gyrations in prices, we don't want
reduction in supply, we want to meet demand, we want a stable oil
price," al-Naimi added. "We have to take a step at a time."
Any deal, however, is contingent on the approval of Persian Gulf
neighbor Iran, which was notably absent from the meeting. On Monday,
Iran began exporting crude oil to Europe for the first time in five
years, nearly a month after a group of Western Powers eased long-term
economic sanctions against the nation, paving the way for its return to
global markets. Three Iranian tankers carrying 2 million barrels to
French Oil and Gas company Total, and another 2 million to companies in
Spain and Russia were headed for Europe, Iran deputy oil minister
Rokneddin Javadi told the Shana News Agency. Iran also announced plans
over the weekend to boost its production and exports by 1 million
barrels per day in 2016.
While the four producers are scheduled to meet with Iran and Iraq on
Wednesday in Tehran, Iranian officials are not expected to freeze
production until it returns to pre-sanction levels.
