Oil prices rise slightly as oversupply concerns mount again

A second delegate from Opec said not having Iran in the pact was not the flawless outcome but it was not the worst.

Novak said earlier this month that a meeting of OPEC members and other oil-producing countries could be held between March 20 and April 1. However, oil prices have been retreating from the start of this week after Iran stated it is determined to keep raising its output to pre-sanction levels before it would consider freezing production.

Brent crude futures LCOc1 were down $1.17 at $38.36 a barrel by 0943 GMT, while US crude futures CLc1 were 82 cents lower at $36.36.

The proposed freeze "put a floor under oil prices", Qatari Oil Minister Mohammad Al-Sada said in an e-mailed statement on Wednesday.

Novak said Iran still insisted on a recovery in its oil output before joining any production freeze by the world's leading oil producers to support oil prices.

Kuwait plans to take part in the meeting, acting oil minister Anas al-Saleh said on March 16.

Four major oil producers - Russia, Saudi Arabia, Venezuela and Qatar - said last month they were ready to freeze their output at January levels if other oil-producing countries joined their initiative.

"We talked with ministers of different countries today and discussed the date of the relevant meeting and consultations between OPEC and non-OPEC countries".

South Korea's imports of Iranian crude oil surged 91 percent in February from a year earlier with the United States lifting sanctions on Tehran in January, customs data showed on Tuesday.

Oil producers including Gulf Organisation of the Petroleum Exporting Countries (Opec) members supported holding talks in April on a deal to keep production at current levels, even if Iran declined to participate, Opec sources said on Wednesday.

Brent crude soared above $40 USA and West Texas Intermediate was up 5.8 per cent at the close of trading.

Phillip Futures analyst Daniel Ang however doubted if th price rise will last as the market remains oversupplied and it was still unclear whether the producers will reach agreement. This reportedly corresponds to 73% of global oil production.

 

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