Ejiofor Alike with agency reports
As part of the collaborative efforts between the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producing countries to freeze crude oil output in an attempt to prop up prices, the two groups will hold a meeting in Doha, Qatar on April 17.
Before this development, Saudi Arabia and several fellow OPEC members had agreed with non-OPEC Russia to freeze output at January levels in an attempt to prop up prices.
The renewed cooperation between OPEC and non-OPEC members had led to a rise in the price of oil above $40 per barrel but that was still a fraction of the $115 per barrel of 20 months ago.
However, Iran’s latest position that it would only join the discussions for cooperation after its output has hit 4 million barrels per day (mbpd), had led the price to slump below $40 per barrel before it rose on Wednesday.
Iran’s oil exports are due to reach 2mbpd in the Iranian month that ends on March 19, up from 1.75 million in December 2015.
Iran’s position also made the scheduled meeting of OPEC members with Russia on March 20 to look unlikely.
But wednesday’s announcement by Qatari Oil Minister, Mohammed Bin Saleh Al-Sada, who is also the President of OPEC that the members of the cartel and non- member producers would meet in Doha on April 17 will likely renew confidence in the oil market.
“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,” Bin Saleh Al-Sada was quoted by Reuters as saying in a statement.
The statement said that to date, around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil output, are supporting this initiative.
The Wall Street Journal yesterday reported that oil prices wavered after new data showed some disappointing signs on demand, adding however that the market is still holding to gains tied to a meeting among exporters who may cap their output.
According to the report, the oil market has been pushing higher since the Qatari oil ministry said members of OPEC will meet with Russian energy officials and other oil producers in April to harsh out agreement to limit output.
Light, sweet crude for April delivery recently gained $1.35, or 3.7 per cent, to $37.68 a barrel, while Brent, the global benchmark, gained $1.30, or 3.4 per cent to $40.04 a barrel.