Investing.com - Oil prices rose sharply in North America trade on Wednesday, extending strong gains after Iran’s oil minister said he supports action to stabilize the market and prices.
Iranian Oil Minister Bijan Zanganeh met his counterparts from Venezuela, Iraq and Qatar in Tehran for nearly three hours in an attempt to reach a deal to restrain output and prop up sagging prices.
Speaking following the conclusion of the meeting, Zanganeh said that he “supports efforts by OPEC members to keep prices stable."
Top oil producers Russia and Saudi Arabia on Tuesday agreed to freeze oil production at January levels, provided other oil exporters joined in, but stopped short of agreeing cuts in oil output.
On the ICE Futures Exchange in London, Brent oil for April delivery jumped $1.94, or 6.03%, to trade at $34.12 a barrel by 15:40GMT, or 10:40AM ET.
On Tuesday, London-traded Brent futures dropped $1.21, or 3.62%, after a meeting between oil ministers from Saudi Arabia, Russia, Qatar and Venezuela ended with consensus to freeze output, but said the deal was contingent on other producers joining in, disappointing investors who were hoping for a coordinated supply cut.
Brent prices are down almost 15% in 2016 as investors worried that a huge oversupply in crude was coinciding with a global economic slowdown.
Oil futures are down nearly 70% since the summer of 2014. Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
Elsewhere, crude oil for delivery in March on the New York Mercantile Exchange rallied $1.58, or 5.44%, to trade at $30.63 a barrel. A day earlier, Nymex futures lost 40 cents, or 1.36%.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 3.9 million barrels in the week ended February 12. The reports come out one day later than usual due to Monday’s public holiday in the U.S.
U.S. oil prices are down nearly 24% so far this year. Futures slumped to a 13-year low of $26.05 last Thursday, as record crude inventories at the Cushing delivery hub underlined concerns over a supply glut.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $3.49 a barrel, compared to a gap of $3.14 by close of trade on Tuesday.