Oil is at a five-month high on Tuesday, as hopes of a freeze in production continue to grow, and market sentiment improves.
A single barrel of Brent crude, the European benchmark, reached a price of $43.54 earlier on Tuesday morning, its highest price since the start of December last year.
Brent has since pared some of those gains, and just after 11:45 a.m. BST (6:45 a.m. ET) is trading at $43.20, up 0.86% on the day.
West Texas Intermediate, the US benchmark, has gained 0.57% on the day, and is trading at $40.57 per barrel.
Here’s the chart:
Oil’s five-month high coincides with the comments of the most powerful man in Russian oil, Igor Sechin, who said on Tuesday morning that oil prices can’t stay low for much longer at a conference in Switzerland
Sechin, the chief executive of Russia’s state oil company, Rosneft, says that the price of oil will not stay low , thanks to declining US output.
“The oil price is growing. I think everyone is expecting the successful outcome of our work,” Sechin said, adding that “We will need higher price levels than $45 or even $50 a barrel.” Sechin was speaking at a Financial Times commodity conference in Lausanne.
Oil has fallen from more than $100 per barrel in 2014 to its current price, with global markets plagued by oversupply and a lack of demand.
Sechin has previously been dubbed the “scariest man on earth”, the “second most powerful man in Russia” thanks to his huge influence over Russia’s dominant oil industry, and his close relationship with President Vladimir Putin, and “Darth Vader.”
Russian delegates will be present when OPEC and non-OPEC oil producers meet in Qatar on Sunday. Producers are meeting to discuss whether or not they should freeze output as a means of trying to support the flagging price of oil. Major producers tentatively agreed to a freeze production levels in February, but that freeze is yet to be implemented, and since then opinions have been mixed on whether a freeze will actually happen. Earlier in the day, the head of Iraq’s state oil seller said that freezing output is the “only way” for oil going forward.
While Sechin didn’t specifically mention the meeting, which will take place in Qatar’s capital Doha, he did say that he is already seeing increasing tightness in the market
“US tight oil is decreasing despite preferential tax treatment,” he said. “Shale oil will struggle to spread as they don’t have such favourable conditions as the Americans have.”
Rosneft’s most senior people are not shy of making big calls, at the end of January, a spokesman for the firm called the oil markets “idiotic” after the price of the world’s most crucial rallied on speculation of a production cut from Russia.