The rally in oil prices extended into Asian trade today, a day after the main US contract broke USD 40 for the first time this year on the back of a weak dollar and hopes over output talks due next month.
With hopes growing that the world’s biggest crude producers will hammer out some sort of deal to curb output, investors have in recent weeks been piling back into the commodity, which toyed with 13-year lows last month.
Qatar’s energy minister, Mohammed al-Sada, confirmed this week that exporters from within and outside the OPEC cartel will meet April 17 in Doha, stoking hopes of an agreement to ease a global supply glut.
The initiative is backed by 15 countries accounting for about 73 per cent of worldwide output, said the minister, who also serves as president of the Organisation of the Petroleum Exporting Countries (OPEC).
At around 0920 IST today, US benchmark West Texas Intermediate (WTI) for delivery in April climbed 11 cents, or 0.3 per cent, to USD 40.31. Brent for May gained two cents, or 0.1 per cent, to USD 41.56.
WTI advanced 4.5 per cent yesterday, closing for above USD 40 for the first time since December 3 while Brent jumped 3.0 per cent.
The buying has been given extra fuel by the Federal Reserve, which on Wednesday halved its forecast for US interest rate hikes this year. The statement, citing a global slowdown and market turmoil, sent the dollar plunging, which in turn makes oil cheaper for anyone holding other currencies.