Last Friday the Crude Oil prices rose nearly 7%, and it reached two weeks highs based on the statement from top Kuwait officials that announced the OPEC-Non-OPEC (Organization of the Petroleum Exporting Countries) production freeze could be achieved without cooperation from Iran.
WTI (West Texas Intermediate) opened at $37.53 a barrel, the value coincided with the low of the day and surged more than $2.49 or 6.65% to settle at $39.75 a barrel the price when the market closed. On Wednesday, it was the first time last week when U.S. crude soared more than 5% in a single session. Following the reports from U.S. crude stockpiles, the WTI crude bounced more than $1 a barrel.
Due to the constantly low prices in Oil, Kuwait OPEC Governor Nawal al-Fezaia proposed to have a meeting (highly-anticipated summit on April 17) with all major producers to find some alternatives to the freezing output. Some of the main subjects to be discussed on April 17, suggested by Al-Fezaia, were setting a floor to limit further declines and capping output at February levels.
Since mid-February when the Oil prices hit 13-years low ($26.05 a barrel) and after the agreement between Saudi Arabia, Russia, and two other OPEC producers to limit their production at January levels, the Oil prices recovered roughly 40%. In addition to this, accordingly to the Reuters, Russian officials told that they are working with OPEC, and they are “on schedule” to reach the agreement in order to limit the production of Oil.
“Oil producers have no option but to freeze their production as oil prices are low and hurting everyone,” Al-Fezaia told Bloomberg. “All early signs before the meeting point to this conclusion.”
Separately, the Kuwait OPEC governor highlighted that the complex measures that need to be implemented for the production freeze amongst the producers can be fulfilled even without the support of Iran, country that refused to sign the agreement due to the sanction dating back to 2007. Since March 22, U.S. crude prices dropped from 2016 highs ($41.90 level) because Mohammed Bin Salman, Saudi Arabia deputy crown prince, demanded that the agreement must also be signed by their “rivals” from Iran. To dominate the market share, Bloomberg announced on Friday, that the Forozan Blend crude will be sold by Iran at a discount to countries in Asia.
If we sum up all the events from last week, the crude will manage to close near session highs with more than 7.7% in gains.