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.”
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, 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.
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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.
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