U.S. oil prices jumped nearly 6 percent Wednesday after data showed U.S. crude stockpiles increased by less than half the expected levels and oil producers appeared ready to discuss holding output steady to stabilize prices.
The Federal Reserve’s statement and economic projections released in midafternoon indicating confidence to raise rates later this year further boosted sentiment among oil traders.
Brent crude, the major global benchmark, gained 3.87 percent to $40.24 for May delivery on the London ICE Futures Exchange. West Texas Intermediate (WTI), the chief U.S. benchmark for crude, gained 5.7 percent to $38.42 per barrel for April delivery on the New York Mercantile Exchange.
U.S. crude inventories grew by 1.3 million barrels in the week ended March 11, hitting record highs for the fifth consecutive week, the Energy Information Administration said in its weekly report. Economists had expected growth of 3.4 million barrels and the lower-than-expected number helped spur a rally in oil futures on Wednesday.
Further help in boosting oil prices came from Qatari Energy Minister Mohammed Bin Saleh Al-Sada, who announced that OPEC and non-OPEC members would convene in Doha on April 17 to hammer out a deal to freeze crude output at current levels. Qatar holds the OPEC presidency for 2016.
“To date, around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, are supporting this initiative,” Sada said in a statement, Reuters reported.
Iran, which only recently began exporting crude, has been reluctant to join the effort after Saudi Arabia, Qatar, Venezuela and Russia agreed to stabilize output in February. Iran’s reticence has threatened efforts this year to intervene on the global oil glut that has driven down the price of Brent more than 60 percent over the past 24 months.
Sada’s announcement helped cap a 5 percent drop in prices over the past two daily trading sessions.