Crude oil futures rose on Wednesday as hopes for an agreement among exporters to freeze output underpinned the market, although persistent global oversupply and Iran’s plans to boost production put a cap on gains.
Oil futures recovered from one-month lows to end the previous session up after Kuwait said there were “positive indications an agreement will be reached” on output during a producer meeting scheduled for April 17 in Qatar.
U.S. crude futures CLc1 rose more than a dollar, or 3 percent, to trade at $37 per barrel at 1115 GMT (7.15 a.m. ET). International benchmark Brent futures LCOc1 rose as much as 90 cents to trade at $38.77 a barrel.
“Oil (futures) gained some momentum. The comment by the Kuwait OPEC governor provided some support to prices,” ANZ bank said, but warned that investors would likely remain cautious ahead of the April 17 meeting.
Russian sources familiar with the output freeze plan told Reuters the country wanted to deepen cooperation with OPEC to help the market rebalance faster while seeing prices at around $45-50 a barrel as acceptable.
OPEC’s most influential oil minister, Saudi Arabia’s Ali al-Naimi, will travel to Moscow for a conference a few days after the Doha meeting.
Before the meeting, Latin American producers Colombia, Ecuador, Mexico and Venezuela will meet to discuss the freeze and other methods to bolster crude prices.
An initial output freeze agreed in February has helped oil prices rise from a 12-year low close to $27 a barrel seen in January.
However, prices have fallen in recent days on doubts that a wider deal will be reached, largely because Iran has so far said it has no intention of slowing its production after crippling sanctions against it were lifted in January.
A World Bank official said on Wednesday he did not necessarily see a large rise in oil prices even if the freeze deal were reached this month.
Iranian Oil Minister Bijan Zanganeh said the country’s crude output would reach 4 million barrels per day (bpd) by March 2017, state television reported on Wednesday, with plans to export 2.25 million bpd of those supplies.
That would be up from exports of as little as 1 million bpd under the sanctions and only slightly below pre-sanctions peaks of 2.5 million bpd.
Later on Wednesday, the U.S. government will release its weekly oil inventories report. Data from the American Petroleum Institute showed on Tuesday U.S. crude stocks fell last week as refineries boosted output and imports fell sharply.