Oil is at a five-month high Tuesday, as hopes of a freeze in production continue to grow and market sentiment improves.
The price per barrel of Brent crude, the European benchmark, reached $43.54 (£30.39) earlier Tuesday morning, its highest price since early December.
Brent has since pared some of those gains, and just after 11:45 a.m. BST (6:45 a.m. ET) it was trading at $43.20 (£30.15), up 0.86%.
West Texas Intermediate, the US benchmark, has gained 0.57% on the day and is trading at $40.57 (£28.32) a barrel.
Here’s the chart:
Oil’s five-month high coincides with the comments of the most powerful man in Russian oil, Igor Sechin, who on Tuesday morning at a conference in Switzerland said oil prices couldn’t stay low for much longer.
Sechin, the chief executive of Russia’s state oil company, Rosneft, says the price of oil will not stay low, thanks to declining US output.
“The oil price is growing. I think everyone is expecting the successful outcome of our work,” Sechin said, adding: “We will need higher price levels than $45 or even $50 a barrel.” Sechin was speaking at a Financial Times commodity conference in Lausanne.
Sechin has previously been dubbed the “scariest man on earth,” the “second most powerful man in Russia,” and “Darth Vader” thanks to his huge influence over Russia’s dominant oil industry and his close relationship with President Vladimir Putin.
Oil has fallen to its current levels from more than $100 a barrel in 2014, with global markets plagued by oversupply and a lack of demand.
Russian delegates will be present when OPEC and non-OPEC oil producers meet in Qatar on Sunday. Producers are meeting to discuss whether they should freeze output as a means of trying to support the flagging price of oil.
Major producers tentatively agreed to freeze production levels in February, but that freeze is yet to be implemented, and since then opinions have been mixed on whether a freeze will actually happen. Earlier Tuesday, the head of Iraq’s state oil seller said freezing output was the “only way” for oil going forward.
While Sechin didn’t specifically mention the meeting, which will take place in Qatar’s capital, Doha, he did say he was already seeing increasing tightness in the market.
“US tight oil is decreasing despite preferential tax treatment,” he said. “Shale oil will struggle to spread as they don’t have such favorable conditions as the Americans have.”
Rosneft’s most senior people are not shy of making big calls; at the end of January a spokesman for the firm called the oil markets “idiotic” after the price of the world’s most crucial commodity rallied on speculation of a production cut from Russia.