Singapore: Oil extended its rise to above $41 a barrel on Wednesday after Opec said it may deepen record oil supply cuts in an attempt to boost prices, sparking expectations of a shrink in hefty crude inventories.
Firmer equity markets, with Japan’s Nikkei average up 0.9% on Wednesday, also helped oil prices.
US light crude for March delivery rose 30 cents to $41.08 a barrel by 7:10am, but is still down 6% from the start of the year and more than 50% from a year ago.
London Brent crude rose 15 cents to $44.23 a barrel.
Oil has plummeted by more than $100 since its record near $150 a barrel as a global downturn weighs on demand for fuels.
The President of the Organization of the Petroleum Exporting Countries (Opec) told Reuters on Tuesday the group could add to its agreed output cuts of 4.2 million barrels per day when it meets on 15 March.
Opec in January met only two thirds of its pledge to lower oil output as several members of the producer group continued to pump above target levels, a Reuters survey showed.
“While the pressure from oil producing nations continues to be matched by weak economic data, all eyes are on the stimulus packages and how they will affect demand in the coming months,” said Jonathan Kornafel, Asia director at Hudson Capital Energy.
On Tuesday, authorities increased the flow of public funds into their economies as a jump in Spanish unemployment and weak retail sales in the United States and Germany provided the latest proof of a severe, synchronised recession.
News that about 30,000 unionised workers at US refineries, chemical plants and pipelines reached a deal with industry on a new basic contract on Tuesday, averting a nationwide strike, failed to pressure prices.
US crude oil stockpiles jumped 8.1 million barrels last week, according to a report on Tuesday from the American Petroleum Institute.
The oil market has been in contango, with oil for delivery next March a third pricier than for the March this year, creating a chance for traders to profit from storing crude for later use.
But oil traders and analysts consider the API report to be less credible than the US Energy Information Administration data, which comes out later on Wednesday and which requires energy companies to respond to their weekly survey.
The EIA data is expected to show US crude inventories rose for the sixth straight time last week as refinery utilisation remained curbed by seasonal maintenance and imports rose, a Reuters poll of analysts showed.