Oil prices jumped on Tuesday night after an awful start to the month.
Prices plunged last week after Saudi Arabia’s Prince Mohammad bin Salman hinted that the country would only participate in output freezes if Iran also played ball.
But now OPEC is hinting that an agreement on a freeze can be reached whether Iran agrees or not.
The Kuwaiti governor for the Organisation of the Petroleum Exporting Countries (OPEC), Nawal Al-Fuzaia, said there were “positive indications an agreement [on a price freeze] will be reached,” according to Reuters.
This was apparently enough optimism for oil investors, and both West Texas Intermediate (WTI) crude oil and Brent oil rose on the announcement.
Major oil producers are due to meet in Qatar on April 17 to discuss curbing output. However Iran has said that it still expects its production to reach four million barrels a day by this time next year.
(WTI) crude oil jumped 2.76% at OPEC’s optimism, climbing to to $36.88 as of 8:45 am GMT:
Brent crude oil enjoyed a not quite as big jump of 1.95% to land at $38.61 as of 8:45 am GMT:
Analysts warned that investors should still pay attention to Iran regardless of its involvement in output freeze agreements:
“[Kuwait] seems to think that a production freeze deal is possible even without Iran,” Tim Evans, energy futures specialist at Citi Futures, told MSNBC.
“While that’s technically true, we also think it would be ineffective in bending the path of future production, leaving the expected global surplus in place.”