Light, sweet crude oil prices for May delivery climbed modestly on the New York market Apr. 11 to settle above $40/bbl, marking its highest front-month closing in about 3 weeks. Brent crude oil prices on the London market for June closed above $42.80/bbl, marking a 4-month high.
Analysts attributed the gains to various factors including a weakening dollar and hopes that the Apr. 17 meeting in Qatar of major oil producers might result an agreement by Russia, Saudi Arabia, and others to freeze output levels at January levels.
Iran oil officials have said they are working to boost oil production and exports to regain market share since nuclear-related international sanctions have been lifted. Iran has repeatedly said it is unwilling to freeze production.
The Qatar meeting is expected to include representatives from the Organization of Petroleum Exporting Countries and non-OPEC.
Commerzbank analysts said expectations of an agreement was “bound to be playing its part,” in supporting oil prices this week. “Considerable correction potential has built up if the outcome of the Doha meeting were to prove disappointing,” Commerzbank analysts said.
Societe Generale analysts estimate a 50% probability that the meeting will result in a production freeze.
“A freeze, excluding Iran, is all about market psychology,” Societe Generale said. “It will have little to no impact on real crude production. However, the impact of market psychology could still be quite large.”
The NYMEX natural gas contract for May declined by nearly 8¢ to $1.91/MMbtu. The Henry Hub price was down 10¢ to $1.88 on Apr. 11.
Heating oil for May delivery rose 1.4¢ to a rounded $1.21/gal. The price for reformulated gasoline stock for oxygenates blending for May was up 4¢ to a rounded $1.51/gal.
The Brent crude contract for June on London’s ICE climbed 89¢ to $42.83/bbl. The July contract climbed 93¢ to $42.95/bbl. The gas oil contract was $362.25/tonne, up $7.50.
The average price for the Organization of Petroleum Exporting Countries’ basket of 13 benchmark crudes on Apr. 11 was $37.02/bbl, up $1.01.
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