Oil prices rise about 4%

17/03/2016 06:58 AST

Crude prices rose about 4 percent, resuming their rally from a two-day slide, as US stockpiles grew by less than half the levels expected while major oil producers readied to meet in Qatar next month on output freeze plan.

The market is also the lookout for a Federal Reserve policy statement due later in the day to glean direction on US interest rates.

Brent crude was up 1.45, or 3.7 percent, at $40.18 a barrel by 1521 GMT. US crude rose $1.51, or 4.2 percent, to $37.85. Crude inventories in the US grew by 1.3 million barrels in the week to March 11 to 523.2 million, hitting record highs for a fifth straight week, data from the Energy Information Administration (EIA) showed. Analysts polled by Reuters had expected a 3.4 million-barrel gain.

“The data is moderately bullish with crude builds less than expected, coupled with strong gasoline demand driven by lower prices at the pump,” said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Oil prices, already up about 3 percent in early trade, gained further on the EIA data, before steadying ahead of the Fed announcement.

Earlier in the day, Qatari Oil Minister Mohammed bin Saleh Al-Sada said producers from within and outside of the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss output freeze plans. That helped crude prices resume their rally after a 5 percent slide over the past two sessions.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the output freeze initiative, the Qatari minister said in a statement.

Arab News