London - Oil pared gains as Russia and Saudi Arabia agreed to freeze oil output at January levels after talks in Qatar.
Brent crude was about 1.1% higher, having earlier climbed as much as 6.5%. Producers will keep output steady at January levels, Qatar Energy Minister Mohammad bin Saleh al-Sada told reporters in Doha on Tuesday, adding that low prices haven’t been positive for the global economy.
Saudi Arabia’s Ali al-Naimi agreed that keeping production steady would be adequate, while also saying that demand is rising and that the kingdom wanted to satisfy customers.
"A freeze would not create an immediate U-turn but it creates a better foundation for the price recovery in the second half," Olivier Jakob, managing director of oil consultants Petromatrix GmBh, said in a note to clients before the meeting concluded.
Venezuela has lobbied exporters including Russia, Iran and Saudi Arabia to arrange a meeting between OPEC members and other suppliers in an attempt to reach an agreement to balance the market.
Oil is still down about 5% this year amid the outlook for increased Iranian exports. BP predicts the market will remain “tough and choppy” in the first half as it contends with a surplus of 1 million barrels a day.
Brent for April settlement traded 32 cents higher at $33.71 a barrel, after advancing as much as $2.16 to $35.55 a barrel on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $1.66 to West Texas Intermediate for April.