Singapore, Mar 17: Oil prices extended their gains in Asia today after key producers agreed to meet next month to discuss limiting output and stabilise a long-running price decline.
Qatar's energy minister, Mohammed al-Sada, confirmed that exporters from within and outside the OPEC cartel will meet April 17 in Doha, stoking hopes of an agreement to ease a global supply glut.
The initiative is backed by 15 countries accounting for about 73 per cent of worldwide output, said the minister, who also serves as president of the Organisation of the Petroleum Exporting Countries (OPEC).
Russian Energy Minister Alexander Novak, who supports the initiative, said Iran had indicated that it is "ready to participate" in the meeting, days after Tehran had warned it would not consider any limits until it had roughly doubled production to four million barrels a day.
At around 1130 IST, US benchmark West Texas Intermediate (WTI) for delivery in April climbed 48 cents, or 1.25 per cent, to USD 38.94. Brent for May rose 18 cents, or 0.45 per cent, to USD 40.51.
WTI rose 5.8 per cent and Brent advanced 4.1 per cent to firmly close above USD 40 a barrel yesterday. Phillip Futures analyst Daniel Ang however doubted if the rally will last as the market remains oversupplied and it is still unclear whether the producers will reach an agreement.
"The fundamentals for oil are still weak unless OPEC or the other major oil producers do something next month," he told AFP. "So I would think that this bullishness will find some difficulty to break higher." Other analysts have noted that the meeting is only to talk about a freeze and not a cut in production.
Prices have rallied from near 13-year lows touched in February after Russia and Saudi Arabia mooted a meeting to freeze output.
News of the producers' meeting overshadowed a report showing a lower-than-expected build in US commercial crude inventories. A weaker dollar after the Fed decided against an interest rate increase yesterday also provided support to prices as it makes the commodity cheaper for clients using other currencies.