Russia's oil production could fall in April, sources said, while the
country's energy minister expressed hopes that producer nations
could agree to an output freeze at a meeting in Doha later this
Front-month U.S. West Texas Intermediate (WTI) crude futures were
trading $1.33 higher at $38.59 per barrel at 0954 GMT, more than 3
percent above their last close. International Brent futures were up
$1.30 at $40.73 a barrel.
"You have declining supply in the United States and a declining rig
rate," said Bjarne Schieldrop, chief commodities analyst with SEB
Bank in Oslo.
"You mix that with outages in Nigeria ... and put Doha on top of it,
and your eyes are looking towards the tightening of the market."
U.S. crude stocks marked a surprise decline, Energy Information
Administration data showed, while stocks at the Cushing, Oklahoma
hub dropped by more than 480,000 barrels due to the shutdown of the
Keystone pipeline. [EIA/S]
Summer maintenance in the North Sea fields that form the basis of
the Brent benchmark also helped boost near-term prices.
Bank of America Merrill Lynch said in a note that U.S. shale
production was in "freefall" and that "as the global oil glut starts
to clear, crude oil should lead the way".
[to top of second column]
A rebound in financial markets also boosted optimism over demand.
The U.S. Federal Reserve said the country was on the path of more
economic growth, while rating agency Moody's said Germany, Europe's
biggest economy, should see a slight acceleration in growth to 1.8
Still, some warned that oil prices could fall again, dragged down by
a glut that will take time to clear and soaring production outside
the United States.
"We believe the current oil price is unsustainable and expect a
fundamental price recovery when markets move into better balance in
mid- to late-2H16," investment bank Jefferies said, adding that "the
recovery could be protracted".
Iraq said on Thursday that exports from its southern ports had hit
almost 3.5 million barrels per day by April, up from an average of
3.29 million bpd in March, while Iran said it would participate in a
production freeze only once it had regained its pre-sanctions level
of 4 million bpd.
(Additional reporting by Henning Gloystein in Singapore; Editing by
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