Oil rose further above $30 a barrel, Tuesday, lifted by hopes that Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers may be edging closer to a deal to tackle one of the biggest supply gluts in decades.
OPEC is making renewed calls for rival producers to cut supply alongside its members, but Russia, seen as key to any deal, has so far refused to cooperate.
Iraq’s oil minister said on Tuesday he saw some flexibility for a deal between OPEC and non-OPEC.
Brent crude rose 17 cents to $30.67 a barrel by Tuesday morning, rebounding from an earlier decline. It reached $27.10, its lowest since November 2003, on January 20. U.S. crude was up 7 cents at $30.41.
Despite a price collapse and spending cutbacks across much of the industry, major OPEC producers are sticking to investment plans and some intend to boost supply.
The risk of prices staying low for a longer time is not deterring Kuwait from investing in energy projects, the head of Kuwait Petroleum Corp said on Tuesday, echoing similar comments from the chairman of Saudi Arabia’s state oil company.
Iraq may further boost output this year, a senior Iraqi oil official, who asked not to be identified, said on Monday. Production hit a record in December.
Investors are now watching the U.S. Federal Reserve policy meeting starting later in the day, the first since the central bank raised interest rates in December, for clues on the movement of the dollar.
Underlining the glut, analysts expect the latest weekly reports on U.S. supplies to show crude inventories, already close to a record high, rose further.
