Brent crude futures rose 2% today, with Reuters reporting some indicators are pointing to the possibility the market could be bottoming out.
Brent futures were trading at $35.96 as of 9:50 this morning, up 2.45%, or $0.86 per barrel.. U.S. crude futures, meanwhile, were up 1.65%, or $0.54 per barrel, to $33.32.
Since Feb. 11, the last time brent was below $30, the benchmark price has risen by 17%, though prices are still a fraction of the $115 of 20 months ago.
The rise this morning comes as OPEC kingpin Saudi Arabia says it will work with other producers to limit oil market volatility. Analysts tell Reuters the first signs of a stronger outlook are now appearing after a 20-month rout that has seen prices fall by 70%.
“The kingdom (of Saudi Arabia) seeks to achieve stability in the oil markets and will always remain in contact with all main producers in an attempt to limit volatility and it welcomes any cooperative action,” the Saudi cabinet says in a statement.
Saudi Arabia and several fellow OPEC members agreed with non-OPEC Russia this month to freeze output at January levels in an attempt to prop up prices.
Russian President Vladimir Putin called a meeting with top managers of his country’s leading oil producers on Tuesday.
However, Iran remains the main obstacle to a global output freeze because it is determined to ramp up supply after the country’s emergence from international economic sanctions in January.
Iran says today it had increased exports steeply over the past month. Exports climbed as high as 1.75 million barrels per day, adding to an already oversupplied market.
“There is still a lot of downside risk … but the U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels,” says Richard Gorry, director of JBC Energy Asia.
