Oil producers led by top exporters Saudi Arabia and Russia plan to
meet in Qatar on Sunday to discuss freezing output around current
levels in an effort to contain a glut that sees some 1.5 million
barrels of crude produced every day in excess of demand.
Traders said they were reluctant to take on new positions ahead of
the meeting, which takes place outside market hours.
"Momentum is building behind an agreement that likely excludes Iran
(and potentially Libya). While there will likely be little effect on
the physical market an agreement would represent an important
psychological shift in setting oil prices," investment bank
Jefferies said on Friday.

Brent crude futures <LCOc1> were at $42.94 a barrel at 1148 GMT,
down 90 cents from their previous close after falling by more than
$1. U.S. West Texas Intermediate (WTI) futures <CLc1> were also down
85 cents, trading at $40.65.
Yet with discussions among producers focussing on freezing output
levels rather than cutting them, most analysts said they had little
hope for a Doha deal that reduces the global oversupply.
The glut has pulled down crude prices by as much as 70 percent since
mid-2014.
"The Doha meeting does not materially change the oil market
balances," Barclays bank said.
Instead of pushing prices up by much, Barclays said an agreement
could prevent prices from otherwise falling further.
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"If recent supply-side fundamental support holds and the market's
expectations for a credible statement and commitment are met, the
meeting could help prevent prices from falling back to the low $30
range."
Energy consultancy Wood Mackenzie said: "Even if an output freeze is
announced, we do not expect a genuine one to occur during the
remainder of 2016."
Instead, Wood Mackenzie said it expected "OPEC output to rise 0.5
million barrels per day (bpd) year on year in 2016, with most of
that growth coming from Iran and Iraq, both of whom have indicated
plans to grow output in 2016."
(Additional reporting by Henning Gloystein in Singapore; editing by
Jason Neely)
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