Venezuelan Oil Minister Eulogio del Pino, on a tour of oil producers to lobby for action to prop up prices, said yesterday he had a “good and productive” meeting with Qatar’s Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada.
The Ministry of Energy and Industry also said the two ministers “exchanged views and expectations in the short and long term”, but gave no further details.
Qatar is the current holder of the rotating Opec presidency.
Cash-strapped Opec member Venezuela has been calling for an emergency meeting of producers to discuss steps to prop up prices, which are close to their lowest since 2003.
On Wednesday, Iranian news agency Shana quoted Del Pino as saying six producing countries, including Opec members Iran and Iraq and non-members Russia and Oman, supported a producer meeting.
But so far, none of Opec’s Gulf members has publicly backed a meeting.
The Venezuelan minister is scheduled to visit Riyadh for further negotiations. He is scheduled to meet Saudi Oil Minister Ali al-Naimi there on Sunday.
Meanwhile, oil prices rose for a second straight day yesterday, with Brent trading above $35 a barrel on signs of possible talks aimed at a cut in global production.
Crude added to the previous session’s 7% jump after an Iranian official was quoted as saying Tehran supported a meeting between Opec and other oil producers. That raised hopes they could take action to support prices despite widespread scepticism in the market.
Iran’s role in any potential deal to rein in production is critical, as it appears determined to boost production and gain market share after the lifting of sanctions.
“Headlines continue to fly about an Opec/non-Opec meeting. We are currently in an environment of elevated rumours,” said Olivier Jakob, oil analyst at Petromatrix. “Without a fresh development Brent might face some difficulty to fly above $40.”
Brent futures rose 39 cents, or 1.1% to $35.43 a barrel, by 10.55am EST (1555 GMT). Prices have gained about 25% since falling on January 20 to $27.10, the lowest since November 2003. US crude rose 89 cents to $33.17 per barrel, a 2.8% gain.
After falling as much as 11% over two days, oil soared 7% on Wednesday. In part fuelling the week’s roller-coaster ride was the sudden liquidation of a $600mn leveraged fund bet on falling prices, market sources said.
While the likelihood of a co-ordinated production cut is unlikely, the need is evident, analysts say.
“Many people are hoping that oil prices go higher, especially producing countries whose budgets are under stress,” said Andrew Lipow of Lipow Oil Associates.
“They’re in dire financial straits and want to take action in order to increase the price of crude oil, but the problem is that I don’t believe every Opec and non-Opec member is willing to all cut their proportionate share.”
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