Wednesday, July 30, 2025
7:20 PM
Doha,Qatar
Oil

Oil hits 2016 high above $43 on producer meeting hopes

* Chinese vehicle sales rise 8.8% in March

* US dollar weakness supports commodities

* Kuwait oil and gas workers to go on strike from Sunday

* US crude inventories expected to rise this week  

Oil reached a 2016 high above $43 a barrel on Tuesday, supported by hopes that an upcoming meeting of oil producers will agree steps to tackle a supply glut, and by a weak US dollar and further signs of strong demand in China.

Many members of Opec plus outside producers such as Russia are meeting Doha on Sunday to discuss freezing output. The dollar fell to its lowest in nearly eight months against a basket of currencies, supporting commodities.

Brent crude was up 50 cents at $43.33 a barrel at 0842 GMT and earlier in the session reached a 2016 high of $43.53. US crude gained 39 cents to $40.75 a barrel.

"The weak dollar is one important reason," said Eugen Weinberg of Commerzbank. "Also, the fact that we are above $40 and at multi-month highs is also contributing to the price increase as it is prompting some speculative buying."

Also supporting prices was rising vehicle sales in China - a further sign of strong gasoline demand in the No. 2 consumer - and a plan by thousands of oil and gas workers in Kuwait to go on strike from Sunday.

"If it is not clear if the strike will last long and will have any meaningful impact on exports or domestic production (including refineries), it does illustrate further the amount of pain that (Gulf) oil producers are also facing at current price levels," said Olivier Jakob, analyst at Petromatrix.

Oil prices have collapsed from above $100 in mid-2014 due to oversupply. The Organisation of the Petroleum Exporting Countries' decision in November 2014 to abandon its traditional role of cutting output helped deepen the decline.

In a sign that oversupply may be easing, the structure of the Brent crude market has strengthened and the discount at which the first-month contract is trading to the second - known as contango - has narrowed significantly.

This is partly in response to oilfield maintenance in the North Sea in June that will reduce supply of the crudes underpinning the Brent benchmark.

Crude gained a boost last week after a surprise decline in US inventories from a record high. But this week's US supply reports are expected to show an increase in stocks of 2.8mn barrels.

Comments
  • There are no comments.

Add Comments

B1Details

Latest News

SPORT

Canada's youngsters set stage for new era

Saying goodbye is never easy, especially when you are saying farewell to those that have left a positive impression. That was the case earlier this month when Canada hosted Mexico in a friendly at BC Place stadium in Vancouver.

1:43 PM February 26 2017
TECHNOLOGY

A payment plan for universal education

Some 60mn primary-school-age children have no access to formal education

11:46 AM December 14 2016
CULTURE

10-man Lekhwiya leave it late to draw Rayyan 2-2

Lekhwiya’s El Arabi scores the equaliser after Tresor is sent off; Tabata, al-Harazi score for QSL champions

7:10 AM November 26 2016
ARABIA

Yemeni minister hopes 48-hour truce will be maintained

The Yemeni Minister of Tourism, Dr Mohamed Abdul Majid Qubati, yesterday expressed hope that the 48-hour ceasefire in Yemen declared by the Command of Coalition Forces on Saturday will be maintained in order to lift the siege imposed on Taz City and ease the entry of humanitarian aid to the besieged

10:30 AM November 27 2016
ARABIA

QM initiative aims to educate society on arts and heritage

Some 200 teachers from schools across the country attended Qatar Museum’s (QM) first ever Teachers Council at the Museum of Islamic Art (MIA) yesterday.

10:55 PM November 27 2016
ARABIA

Qatar, Indonesia to boost judicial ties

The Supreme Judiciary Council (SJC) of Qatar and the Indonesian Supreme Court (SCI) have signed a Memorandum of Understanding (MoU) on judicial co-operation, it was announced yesterday.

10:30 AM November 28 2016
ECONOMY

Sri Lanka eyes Qatar LNG to fuel power plants in ‘clean energy shift’

Sri Lanka is keen on importing liquefied natural gas (LNG) from Qatar as part of government policy to shift to clean energy, Minister of City Planning and Water Supply Rauff Hakeem has said.

10:25 AM November 12 2016
B2Details
C7Details