SINGAPORE: Oil prices rose on Tuesday with Brent breaking past $34 a barrel on expectations that energy heavyweights Russia and Saudi Arabia will discuss the global oversupply issue in a Doha meeting.
At around 0330 GMT, European benchmark Brent crude for April delivery was trading $1.15, or 3.44 percent, higher at $34.54.
Its US counterpart West Texas Intermediate for March delivery was up $1.33, or 4.52 percent, at $30.77 compared to its Friday close. There was no settlement in the New York Mercantile Exchange on Monday due to a US public holiday.
“As representatives from major oil producers fly to Doha to meet, the bullish flames get fanned, causing prices to remain strong,” said Daniel Ang, investment analyst at Phillip Futures in Singapore.
“As much as we continue to believe that this is yet another meeting that would yield nothing, the markets remain wary of any sudden agreement that major oil producers could come to.”
Oil prices have been depressed since last peaking in mid-2014 due to oversupply, sluggish demand and slowing economies. They are currently down about 70 percent from June 2014 levels.
Adding to the pressure on prices is the resumption of Iranian oil exports this year after international sanctions linked to its nuclear programme were eased by world powers.
Bloomberg News reported that Saudi Arabia s Oil Minister Ali al-Naimi was expected to speak privately with his Russian counterpart Alexander Novak in Doha on Tuesday.
“It does seem like Russia has been invited into the inner circle of OPEC countries which was vastly different from a year ago.” said Ang.
“However, we still remain skeptical for an agreement to be struck between those who are attending the meeting.”