Oil prices today built on recent gains after data showed US production fell to 18-month lows and Iraq pushed for a fresh meeting of crude majors on limiting output.
The advances come just days after the collapse of weekend talks aimed at negotiating an output freeze, which had fuelled worries a global supply glut would continue.
Upbeat economic readings from China—the world’s biggest energy user—expectations the Federal Reserve will not hike interest rates before June, and a series of easing measures by central banks have fuelled optimism in world markets recently.
Prices surged four percent to near five-month highs Wednesday after the US energy department revealed the dip production last week to levels not seen since October 2014.
And at about 0400 today in Asia US benchmark West Texas Intermediate for delivery in June was up 12 cents, or 0.27 per cent, at USD 44.30 while Brent crude for June added eight cents, or 0.17 per cent, to USD 45.88.
“The panic associated with the Doha meeting failure gradually faded away and the market has started to look forward,” said Margaret Yang, an analyst with CMC Markets in Singapore.
Rising US shale production has been a key contributor to the global oversupply, along with elevated output from other producers including Saudi Arabia and Russia.
Reports that Iraq is pushing for new talks after the collapse of the Doha gathering Sunday also provided strong support.
The country’s Deputy Oil Minister Fayyad Al-Nima said major OPEC and non-OPEC producers would meet again in May in a fresh effort to reach a deal on limiting production.
The Doha meeting fell apart after kingpin Saudi Arabia pulled out owing to bitter rival Iran’s refusal to impose output limits. Tehran said it was still in the process of raising production after the removal of nuclear-linked Western sanctions in January.