TEMPO.CO, Jakarta-Crude oil prices in the global market experienced an appreciation on Tuesday morning, April 12, 2016, Jakarta time, ahead of the planned meeting of the world's main oil producers in Qatar next week, where major players are expected to further discuss the possibility of putting a cap on the overall production output next week.
May contracts for the US benchmark, the West Texas Intermediate (WTI), went up by 64 cents to conclude trading at US$40.36 per barrel at the New York Mercantile Exchange on Tuesday morning, Jakarta time - while June contracts for the European benchmark, the Brent North Sea oil, went up by 89 cents to conclude trading at US$42.83 per barrel.
These gains meant that prices have gone up by more than six percent since Friday last week, after reserve figures in the US indicates that their surplus is slightly declining, as companies begin to lower their production output.
Bart Malek from TD Securities said that the upcoming April 17 meeting in Doha should be oriented to ensure all major oil producers to commit to realistically limit their maximum daily oil production output, so crude prices could remain stable.
That said, an analyst for Citi Futures, Tim Evans, said that high production output in Russia and Iraq might undermine the result of any agreement that may come out in the meeting - furthermore, there has been talks that Kuwait is planning to increase its oil production output in the years following 2016.
"These producers are probably just trying to eke out as much profit as they can from the market as embargoes on their oils have been lifted, but it seriously undermines the spirit of limiting the excess of oil reserves in the world to control oil prices, which creates worries among commodities brokers, and hence produces further uncertainties and instabilities," said Evans.
Organization of Oil Producing Countries (OPEC) Kuwait Manager, Nawal al-Fezaia, said last Tuesday OPEC is optimistic that major oil producers could reach an agreement to limit the oil production, even if Iran refuses to partake in the negotiations. However, investment bank Goldman Sachs warned that negotiations might still fail to create an impact, especially considering that the excess in reserves is actually still very high, AFP reported.
ANTARA
