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Oil up as Kuwait revives hope for output freeze deal

Oil prices climbed in Asia after Kuwait said an agreement to freeze output during a producers’ meeting

Published: Updated:

Oil prices climbed in Asia Wednesday after Kuwait said an agreement to freeze output during a producers’ meeting this month could still be reached despite conflicting statements by participants.

But analysts said the rebound would not likely last owing to a painful supply glut and weak demand caused by the slowing world economy.

At around 0815 GMT Wednesday, US benchmark West Texas Intermediate for delivery in May was up $1.03, or 2.87 percent, at $36.90 and Brent crude for June was 72 cents, or 1.90 percent, higher at $38.59.

Both contracts eked out an increase on Tuesday, but prices are still well below the $40 level reached last month following a rally driven by hopes of an agreement during the upcoming April 17 producers’ meeting in Doha.

Prices dived after Saudi Deputy Crown Prince Mohammed bin Salman said last week his country would only agree to limit output if rival producers, such as Iran, followed suit.

But Iran, which has been raising production since the West lifted nuclear-linked sanctions in January, has insisted it should not be the one to cut back.

Key OPEC member Kuwait, however, said a freeze deal could still be reached without Tehran, Bloomberg News reported.

It quoted Kuwait’s OPEC governor, Nawal al-Fezaia, as saying that major producers had no option but to reach an agreement and that a freeze could set a floor price.