Doha hopes: Oil prices jump on signs of US cutbacks

Meeting to discuss measures to stabilise prices, including a production freeze

NEW YORK: Oil prices jumped on Friday to cap a week of gains, helped by more indicators of slowing US output and hopes for an output freeze at the coming producers’ gathering in Doha.

New York benchmark WTI for delivery in May gained 6.6 per cent to $39.72 a barrel. In London Brent North Sea crude for June surged 6.4 per cent to $41.94 a barrel.

Both contracts were up eight per cent or more for the week, with declining US stockpiles and weaker output helping sentiment. On Friday the prolonged slowdown in North American oil production was boosted by another fall in the number of active drilling rigs in the United States and Canada.

Total US rigs fell by eight last week to a multi-decade low of 354, according to the Baker Hughes weekly tally, compared to 760 a year ago.

Earlier in the week the US government reported another decline in domestic crude output to barely above nine million barrels a day after peaking at about 9.7 million barrels a day a year ago.

In addition, US commercial crude inventories unexpectedly slumped in the week ending April 1. Together they supported buying in a market starved for signs of firming.

Traders were meanwhile setting their sights on the April 17 meeting, led by Russia and Saudi Arabia, to discuss measures to stabilise prices, including a production freeze at January levels. 

Published in The Express Tribune, April 10^th, 2016.

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