Oil rose above $41 a barrel briefly on Thursday, trading close to a 2016 high, boosted by a plan among some of the world’s biggest producers to meet next month to discuss supporting the market.
Whether Iran decides to participate or not, OPEC and non-OPEC producers including the top two exporters, Saudi Arabia and Russia, will hold talks on April 17 in Qatar over a plan to freeze output, increasing the likelihood of the first global supply deal in 15 years.
Sources close to the matter told Asharq al-Awsat newspaper that the meeting will be held disregarding Iran’s refusal of joining the agreement until it hits a production of 4 million barrels per day and regains the share in the past three years due to the now-lifted embargo on buying Iranian crude oil.
Brent crude was up 60 cents at $40.93 by 1429 GMT and traded as high as $41.44. It has rallied 51 percent from a 12-year low of $27.10 in January and hit a 2016 peak of $41.48 on March 8.
U.S. crude was up $1.04 at $39.50 a barrel.
“For now, the market is staying well supported, and the dollar is proving additional support,” said Olivier Jakob, oil analyst at Petromatrix. “It will be difficult to return to the lows of the year.”
The U.S. dollar weakened following a statement by the Federal Reserve on Wednesday that undermined expectations of a rise in interest rates by June.
A weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies and tends to support oil.
The producer meeting follows a preliminary deal in February between Saudi Arabia, Qatar and Venezuela, plus non-OPEC Russia, to freeze output in a bid to tackle the excess supply that has caused prices to slide from levels above $100 seen in mid-2014.
Qatar’s Energy Minister Mohammed Bin Saleh Al-Sada said on Wednesday around 15 producers in and outside the Organization of the Petroleum Exporting Countries, accounting for about 73 percent of global oil output, supported the initiative.
Oil broker PVM said the meeting was “an encouraging step” but was skeptical that the freeze deal, which ministers have said is based on January 2016 output, would buttress prices.
“It is hard to see such a meeting reaching an agreement that is price-supportive because these producers are discussing the prospect of freezing oil output at historically high levels,” Tamas Varga of PVM said in a report.
Oil also gained support from a smaller-than-expected rise in U.S. inventories. But crude stocks still hit a record, the U.S. Energy Information Administration said on Wednesday.