Oil prices rebound in Asia as US crude exceeds $30
Oil prices have risen in Asian markets after undergoing a steep fall in the previous session as US crude oil rebounded to above USD 30 a barrel.
The price recovery in Asia on Monday was attributed by market analysts to traders mulling the impact of a potential output freeze by a number of key oil producers, AFP reported.
Crude prices rose sharply last week after major oil exporters held talks discussing a potential agreement on output freeze aimed at reducing a global supply glut that pulled prices down to their lowest levels in nearly 13 years this month.
Saudi Arabia and Russia, the world's top crude producers, said they had agreed to limit their production if other major producers followed suit.
On Friday, however, crude oil prices saw a steep fall as traders were anxious that the deal would not move ahead, with analysts cautioning that Iran, which is ramping up its crude output after sanctions were lifted, along with Iraq, had shown little support for the agreement.
Meanwhile, news showing that commercial oil stockpiles in the US, which is the world's top oil consumer, continued to build up, added to the market pressure.
As a result, at around 0630 GMT Monday, US benchmark West Texas Intermediate (WTI) for delivery in March was sold 41 cents, or 1.38 percent, higher at USD 30.05.
Global benchmark, Brent, for April delivery also gained 38 cents, or 1.15 percent, to be sold at USD 33.39 a barrel.
Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at EY, predicted oil prices would remain under pressure, saying that he sees "little evidence of any relief from the oversupply."
According to Gupta, the market will now be "looking for clues on the outlook for crude oil demand from the manufacturing and service sector data from the US and Europe that will be released this week."
Capital Economics, however, noted that even if the producer talks did not lead to an agreement on output freeze, "they may be the first indication of willingness to act to prevent prices falling further."
"A sustained recovery may require something more substantial, but for now at least oil prices appear to have found a floor," it said.
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