Oil prices rise as hopes for output freeze agreement strengthen market

Oil prices have edged up as hopes for an agreement among major producers to freeze production strengthened the market.

International Brent futures were up 54 cents and traded at $38.64 a barrel, while the US crude futures jumped almost 3% to $36.92 per barrel, Reuters reported.

Prices gained support after Kuwait Governor for the Organization of the Petroleum Exporting Countries (OPEC) Nawal Al-Fuzaia said that members of the cartel and other countries are expected to agree later this month to freeze production.

"Prices were also supported by hopes that China’s economy might be stabilising after more than a year of sluggishness."

Producers are set to meet in Doha on 17 April to negotiate the deal.

According to traders, prices were also supported by hopes that China’s economy might be stabilising after more than a year of sluggishness.

Initially announced in February, the output freeze proposal has helped oil prices rise to almost $38 a barrel.

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However, there were doubts that a wider deal will be reached as Iran said it is not willing to cut production. Due to this, prices have fallen in recent days.

After international sanctions were lifted, Iran’s crude output is expected to reach four million barrels per day (bpd) by March 2017, which would be up from over one million bpd.

With an increase in Iran’s exports and pledge by other oil producers to freeze output, an agreement may not do more to tackle the global supply glut issue.