Saudi Arabia, Russia and more than a dozen other producers are gathering in Doha, Qatar on April 17 to discuss a plan to freeze output at January levels.
The Organization of Petroleum Exporting Countries said its forecast for growth in world oil demand in 2016 was lowered by 50,000 barrels per day to 1.2 million bpd.
But in its closely watched oil-market report, the International Energy Agency said “any deal struck will not materially impact the global supply-demand balance” during the first half of 2016.
The Opec report showed that Iranian oil production in March was 3.3 million barrels per day (bpd), up from 2.9 million bpd in January and an average of 2.8 million bpd in 2015.
The IEA, which is due to publish its 2017 estimates in June, slightly trimmed its estimates for 2016 global demand growth from last month to 1.16 million barrels per day.
Oil prices ticked higher Thursday as the dollar fell back after disappointing USA inflation data, but gains were checked ahead of Sunday’s meeting of major suppliers in Doha.
Oil prices plummeted from $115 per barrel in mid-2014 to $41.24 per barrel for WTI Crude and $43.66 per barrel for Brent as of early Thursday.
But the market faded on Wednesday with traders booking profits ahead of USA inventory data and as OPEC warned about the consequences of a global supply glut that has massively depressed profits over the past couple of years. Here too, the outlook is for production to remain higher than many expected.
If an agreement is reached this weekend, McKnight said the price of oil could settle at about $45 a barrel.
The 13-member group pumped 32.25 million bpd in March, the report said citing secondary sources, up 15,000 bpd from February. Such a move would be a significant effort to stabilize oil prices.
The US Energy Information Administration on Wednesday said the US commercial crude stockpiles jumped 6.6 million barrels or more than six times what analysts had expected. “Nevertheless, hurdles prevail as oversupply persists and inventories remain high”.