Oil rose to a four-month high in London ahead of a meeting in Doha this month where producers will discuss freezing output.
Brent for June settlement advanced 2.2% to $42.85 (€37.55) a barrel in London.
The contract earlier rose to $43.06, the highest since December 7. Prices rose 8.5% last week.
Venezuela said the first priority of the April 17 talks should be to cap output, while Azerbaijan said it backs a freeze.
Prices had dropped earlier in the session after Iraq, the Organisation of Petroleum Exporting Countries (Opec) second-biggest producer, boosted output 2% and exports by 18% last month, the state-run Oil Marketing Company said.
“There’s a lot of excitement about the Sunday meeting,” said John Kilduff, partner at Again Capital.
“Speculation that an agreement will be reached is generating some buying. There should be considerable short covering before the meeting,” he said.
Oil has rebounded after falling to the lowest level in over 12 years amid signs that a global glut will ease as US output declines.
Saudi Arabia, the biggest producer in the Opec, said it will agree to a freeze only if it’s joined by other suppliers including Iran.
US crude production slid for the 10th time in 11 weeks through April 1, while stockpiles fell from the highest level in over eight decades, the Energy Information Administration said.
The agency will report on last week’s inventories and output tomorrow.
“Investors are anxious to see if the EIA reports we had another crude draw,” said Bob Yawger, director of the futures division at Mizuho Securities USA in New York.
© Irish Examiner Ltd. All rights reserved