Oil prices dipped slightly in Asia today but stayed above $41 a barrel as OPEC raised the hopes of a moderate rebound from a meeting of key producers in Qatar in April.
At around 0400 GMT, US benchmark West Texas Intermediate (WTI) crude for delivery in May, a new contract, was five cents down at $41.47. Brent for May delivery dropped seven cents to $41.47.
The Organization of the Petroleum Exporting Countries secretary-general Abdalla El-Badri had said in Vienna on Monday that about 15 or 16 nations will attend the discussions on output caps in Doha on April 17, but didn’t know whether Iran will join, Bloomberg News reported.
El-Badri also said he hopes that prices have “bottomed”, adding that he expects crude to enjoy a moderate bounce rather than reach high levels, Bloomberg reported.
The meeting will follow last month’s talks between Qatar, Russia, Saudi Arabia and Venezuela when they proposed an accord to freeze oil output at January levels.
But Sydney-based CMC Markets analyst Michael McCarthy said traders do not expect much from the Qatar meeting.
“I would be surprised if many people in the oil market are holding out much hope for this meeting,” he told AFP.
“The levels of trust required to get so many different nations and companies to curtail their production, I don’t think is there. While it may add to the firm tone of the market, I don’t think it is a key driver.”
Iran has said it would not join the effort until its own crude production reached the pre-sanctions levels of 4.0 million barrels per day, about double its current output.
McCarthy added that Monday’s dip could also be due to “holiday shortening” ahead of the long Easter weekend.
“The hectic start we’ve had to the year has left people reaching for the first opportunity to take a bit of a breather,” he said.
This follows a buoyant week which lifted WTI above $40 for the first time since December, boosted by a sharp drop in the dollar, which generally makes crude less expensive, and revived optimism that producers would strike a deal to freeze output.