London: Crude oil rose for a second day on signs that Organization of the Petroleum Exporting Countries (Opec) is implementing the record production cut announced in December.
Prices are firming up because of output constraint by the Opec and further cuts may not be necessary, Libya’s top oil official, Shokri Ghanem, said in an interview.
“The combination of Opec and non-Opec supply cuts are starting the sentiment that we’re close to peak in stock builds and closer to the bottom in oil prices,” said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Switzerland.
Crude oil for March delivery gained as much as $1.01 (nearly Rs49), or 2.5%, to $41.79 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $41.70 a barrel at 12.47pm London time. Futures are down 6.4% this year and 54% from a year ago.
Opec, supplier of more than 40% of the world’s oil, may not need to cut output when it meets next month, Ghanem said. The group decided on 17 December to trim output 9%.
Crude oil stockpiles increased by three million barrels in the week ended 30 January from 338.9 million barrels the week before, according to the median of 13 analyst estimates before the report. It would be the 17th gain in 19 weeks. All of the analysts said supplies rose.
Brent crude oil for March settlement was at $44.57 a barrel, up 49 cents, on London’s ICE Futures Europe exchange at 12.41pm London time.
The contract gained 26 cents, or 0.6%, on Tuesday to end the session at $44.08 a barrel.