The price of both brent and American crude oil are holding steady on Tuesday morning, following on from a big fall in prices on Monday.
Both crude and brent mirrored each others’ slight upswings as they recovered between 1.87% and 2.41% respectively in the space of 24 hours, although on the day, both are up less than 0.4%.
That recovery comes as talk of production freezes to counter oversupply still continues.
Producers from the Organisation of the Petroleum Exporting Countries (OPEC) are due to meet on April 17 in Qatar to discuss the output freeze, according to RTE, and hope to get Iran involved.
However Iran are keen to take advantage of the lift of recent sanctions and increase its production, so this may be a tough sell. Whether such an Iranian increase in production would have a big effect on oil prices remains to be seen.
RTE reports that OPEC General Secretary Abdallah Salem el-Badri said he hoped oil prices had finally bottomed out:
“The price [is] going up, I hope this trend will continue. I don’t expect the price will go high but I think it will go to a moderate level. At this time, the only problem I see is the overhang above five-year average of stocks, about 300 million barrels. If we are able to get rid of this 300 million barrels, the overhang, then the price will come back to normal.”
As has been the case ever since their sanctions were lifted, oil investors will be keeping a close eye on what Iran decides to do.
Crude oil was at $41.50 just after 10:00 a.m. GMT, up from $40.61 at the same time yesterday, although completely flat from the start of trading:
Brent oil was at $41.69, up from $40.75 at the same time yesterday, but up by just 0.02% on the day.
Commenting on this morning’s movements, Mike van Dulken and Augustin Eden from Accendo Markets said:
Brent and US Light Crude remain in their uptrends from January lows, paring yesterday’s losses after more chat about production freezes. This time someone from OPEC or somewhere has said Iran may participate in a freeze at a later date, which doesn’t mean ‘Iran says it will participate in a production freeze’ and does nothing to address current oversupply issues. Nonetheless, oil prices have of course gone up with both markers bedding in above $40 this morning.
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