Oil held gains after the biggest jump in almost two months as U.S. drillers idled more rigs ahead of talks between the world’s biggest producers about freezing output.
Futures were little changed in New York after increasing 6.6 percent Friday, the most since Feb. 12. The number of active oil rigs fell for the 15th time in 16 weeks to the lowest level since 2009, according to data from Baker Hughes Inc. Venezuela said the first step at the April 17 meeting in Doha between suppliers including Saudi Arabia and Russia should be to cap production.
“The market has positive momentum, so there is a potential for oil to test the highs we saw a few weeks ago,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “Some sort of supply agreement in Doha seems extremely unlikely. Even if a deal were announced, the market will be extremely skeptical of any compliance.”
Oil has rebounded after falling to the lowest in more than 12-years amid signs that a global glut will ease as U.S. output declines. Saudi Arabia said it will agree to a freeze only if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support. Iraq boosted production to a record in March, according to the state-run Oil Marketing Co.
West Texas Intermediate for May delivery was at $39.77 a barrel on the New York Mercantile Exchange, up 5 cents, at 1:37 p.m. Hong Kong time. The contract rose $2.46 to $39.72 a barrel on Friday, capping an 8 percent weekly gain. Total volume traded was about 44 percent above the 100-day average.
Rig Count
Brent for June settlement was 9 cents higher at $42.03 a barrel on the London-based ICE Futures Europe exchange. Prices increased 8.5 percent last week. The global benchmark crude was at an 96-cent premium to WTI for June.
Rigs targeting crude in the U.S. fell by eight to 354, Baker Hughes said on its website Friday. Drillers have idled more than 180 machines this year. The nation’s output slid for the 10th time in 11 weeks through April 1 while crude stockpiles fell, according to data from the Energy Information Administration.
Iraq production and oil-market news:
Energy companies led gains on the MSCI Asia Pacific Index. Iraq output rose to 4.55 million barrels a day in March from 4.46 million barrels in February. Exports increased to 3.81 million barrels a day. Short positions in WTI crude jumped 35 percent in the week ended April 5, according to the U.S. Commodity Futures Trading Commission. TransCanada Corp. restarted the Keystone oil pipeline early Sunday, according to spokesman Mark Cooper.