Oil futures extended gains Friday on hopes that major producers would agree to limit output and support prices.
Brent crude , the global oil benchmark, rose $1.08, or 3%, to $36.78 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures rose $1.10, or 3.4%, to $34.17 a barrel.
Venezuela oil Minister Eulogio Del Pino said late Thursday that four oil-producing countries, including his country, Russia, Saudi Arabia and Qatar, will meet again in mid-March to discuss efforts to stabilize the market.
Oil has been volatile over the past two weeks as investors assessed the prospects of a deal announced by the four producers that seeks to freeze future production at the January levels. However, Iran has vowed to ramp up production until its output reaches pre-sanctions level of around 4 million barrels a day, while Saudi Arabia said an outright production cut is out of the question.
“Iran has been just as clear in its intention to go ahead with planned increases. And it seems to us that a few more hours spent around a conference table are unlikely to change that,” said Tim Evans, a Citi Futures analyst.
Whether producers agree to a freeze or not, the market remains heavily oversupplied. Jason Gammel, an analyst at Jefferies, said supply currently overshoots demand by 1.3 million barrels a day.
According to the latest report of the Organization of the Petroleum Exporting Countries, the bloc’s total crude oil production in January stood at 32.34 million barrels a day, an increase of 131,000 barrels a day from December. Russia pumped crude at a record high of 10.88 million barrels a day in January.