Oil prices firmed on Wednesday on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in US crude production.
Producers both from and outside the Organisation of the Petroleum Exporting Countries (OPEC) will hold talks in the capital Doha on April 17, Qatari oil minister Mohammed Bin Saleh Al-Sada said.
Around 15 OPEC and non-OPEC producers, accounting for about 73 per cent of global oil output, support the initiative, the minister said in a statement.
Brent crude futures were up 48 cents at $39.22 a barrel at 09:48 GMT.
US crude futures were trading 60 cents a barrel higher at $36.94.
Saudi Arabia, Qatar, and Venezuela along with non-OPEC member Russia agreed last month to freeze output at January levels, but Iran has rejected such a deal.
On Monday, Russian Energy Minister Alexander Novak said a deal could be signed excluding Iran, which he said has the right to boost oil output after years of sanctions.
OPEC sources told Reuters a deal excluding Iran is not ideal, but not a deal breaker.
Analysts, however, said talks about freezing output would do little to rein in a global glut that sees more than 1 million barrels of crude produced every day in excess of demand.
“Any such deal would still not be a game changer. It would really just maintain the excess supply that is now in place,” Thomas Pugh of Capital Economics said in a note.
But Standard Chartered said supply concerns due to non-OPEC production cuts could drive prices above $60 a barrel by the end of the year.
“We think that in coming months supply-side concerns will dominate, particularly when global inventories start to fall, which we think will happen in the third quarter,” the bank said in a note.
U.S. shale producer Linn Energy said on Tuesday that bankruptcy may be unavoidable as the company missed interest payments amid a slump in oil prices of as much as 70 per cent since mid-2014.
Other companies, also fighting for survival, are seeking risky and costly borrowing from private equity firms.