Oil advanced to $40 a barrel in London for the first time since December as U.S. drillers cut the number of active rigs to the least in more than six years amid a global glut.
Oil on Friday completed a third week of gains, the longest run since May, as U.S. crude production slid to the lowest since November 2014. Still, the nation’s stockpiles are the largest in more than eight decades and continue growing. A meeting among major producers to discuss freezing output may be held in Russia, Doha or Vienna in the March 20 to April 1 period, Russian Energy Minister Alexander Novak said on state television.
Brent for May settlement increased as much as $1.28, or 3.3 percent, to $40 a barrel on the London-based ICE Futures Europe exchange, the highest since Dec. 10. The contract traded at $39.84 as of 10:21 a.m. in New York. West Texas Intermediate for April delivery added $1.03 to $36.95 a barrel on the New York Mercantile Exchange.
“Investors and traders have been eagerly awaiting their chance to ride the ever-impending oil market rally,” analysts at Barclays Plc including Miswin Mahesh in London said in a report. “Announcements of a second year of massive upstream capex cuts and talks of an output freeze among certain OPEC and non-OPEC countries seem to have provided support to sentiment.”