Oil prices sharply increased last week after major exporters held talks on a potential agreement to minimize a global excess supply.
Oil prices recovered in Asia on last week after a sudden fall in the previous session, with the US crude back above $30 a barrel as buyers considered the effect of a potential freeze by main producers.
Oil spiked sharply last week after major exporters held talks on a potential agreement to minimize a global excess supply that has pulled prices to their lowest levels in closely 13 years this month.
The world’s high ranking crude producers, Saudi Arabia and Russia, have concurred with the limited production if others followed suit.
But crude has reopened its downtrend this month as buyers felt upset due to the deal, would not gain traction, with analysts cautioning Iraq and Iran, which is building output after sanctions were lifted, had appeared a bit support.
The newest commercial oil stockpiles in the US, the world’s top oil consumer, steadily build up and increased to the pressure.
At about 0335 GMT, the US benchmark West Texas Intermediate (WTI) for delivery in March was up 50 cents, or 1.69%, at $30.14. The global benchmark, Brent crude, for April advanced 43 cents, or 1.30%, to $33.44 a barrel.
Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at EY, forecasted prices would remain under pressure and said, he observes “little evidence of any relief from the oversupply”. The market will now be “looking for clues on the outlook for crude oil demand from the manufacturing and service sector data from the US and Europe that will be released this week,” he further added.
Still, the Capital Economics stated even if the producer talks did not lead to an agreement “they may be the first indication of willingness to act to prevent prices falling further”. “A sustained recovery may require something more substantial, but for now, at least, oil prices appear to have found a floor,” it stated.