Oil Trades Near $41 as OPEC Sees Moderate Gains Amid Output Drop

Oil traded near $41 as OPEC said prices will rebound to a “moderate” level even if Iran doesn’t join other producers in freezing output.

May futures in New York were little changed after earlier climbing as much as 0.7 percent. The April contract expired Monday after gaining 1.2 percent. The drop in output outside of the Organization of Petroleum Exporting Countries and a decline in U.S. drilling activity shows OPEC’s strategy of letting the market rebalance itself is working, Secretary General Abdalla El-Badri said. American crude stockpiles are forecast to rise, keeping supplies at the highest level since 1930.

“The market is potentially moving closer to a more balanced situation,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “U.S. production is heading in the right direction. We still have very large inventories, a significant and continuing supply overhang and a period of possible seasonal weakness, so there’s scope for Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.”

Oil slumped to a 12-year low last month before rising on speculation that stronger demand and falling U.S. output will ease a global surplus. While all OPEC members have been invited to the freeze talks in Doha next month, not all will attend, El-Badri said in Vienna on Monday, predicting about 15 or 16 nations will attend the meeting.

West Texas Intermediate for May delivery traded at $41.48 a barrel on the New York Mercantile Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, down 4 cents, at 9:33 a.m. Hong Kong time. Total volume traded was about 35 percent below the 100-day average. The April contract increased 47 cents to close at $39.91 a barrel on Monday.

Brent for May settlement was 8 cents lower at $41.46 a barrel on the London-based ICE Futures Europe exchange. The contract rose 34 cents, or 0.8 percent, to $41.54 Monday. The global benchmark crude was at a 3-cent discount to WTI.

--With assistance from Stephen Stapczynski To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark, Ovais Subhani

By: Ben Sharples

©2016 Bloomberg News