Oil rallied sharply on Monday as investors are hopeful that a meeting of oil producers in Doha on Sunday will yield some positive results on supply.
The meeting on April 17 in Qatar will bring together the majority of the largest OPEC and non-OPEC members to try to “freeze” output in a bid to hasten the end of a near two-year-old glut. This comes as a follow-up to the meeting that was held last month in Doha between Qatar, Saudi Arabia, Russia and Venezuela at which they proposed an accord to freeze oil output at January 2016 levels and called on other producers to do so.
The prospect that the first concerted effort by producer nations to end the glut would be a success helped send Brent up 8.5 per cent last week. It has rallied since hitting a 13-year low near $27 a barrel in January. On Monday Brent shot up as much as 2.7 per cent to $43.06, while the US crude oil benchmark, West Texas Intermediate, climbed 2.6 per to $40.05 — its strongest level since late March.
Iran, a major oil producer, does not want to participate in the oil production freeze but Russian Energy Minister Alexander Novak said that a deal could be signed in April and exclude Iran, which has the right to boost output after years of sanctions.