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Oil prices edge higher
[NEW YORK] Oil prices pushed higher Monday in a market lacking major news that seemed to be supported mainly by technical factors.
Last week's gains lifted US benchmark West Texas Intermediate (WTI) above US$40 for the first time since December, buoyed by a sharp drop in the dollar and revived optimism that producers would strike a deal to freeze output.
US benchmark West Texas Intermediate for delivery in April rose 47 US cents to US$39.91 a barrel Monday on the New York Mercantile Exchange.
In London, Brent North Sea crude for May delivery, the European benchmark, finished at US$41.54 a barrel, up 34 US cents from Friday's close.
"We're surprised it's trading higher" after prices dipped in some profit taking Friday, said Oliver Sloup of iiTrader.com. He pointed to the psychological attraction of the US$40 level, which WTI breached several times during the session.
After the Baker Hughes US oil rig count rose by one last week after falling for more than two months, Mr Sloup predicted this week's report would show rigs coming back online.
"But in the long run, I feel at these prices we're going to see producers in the (United) States put rigs back on line, and I think that will eventually put pressure on the prices," he added.
Analysts said the upcoming meeting of Opec and non-Opec producers on April 17 in Doha, aimed at setting production limits to ease the global glut, continued to underpin the market.
Mr Sloup noted that Opec secretary general Abdullah el-Badri had highlighted Monday, in a news conference, that the coming meeting had a good chance of having a positive impact on the market.
According to Mr Sloup, Mr Badri said that the current market oversupply is 300 million barrels.
"Not only is that a big overhang but production is still high," Mr Sloup said, noting that Iran is still ramping up production.