Oil futures extended strong gains on Thursday, continuing to gather support after the world’s biggest suppliers firmed up plans to meet to discuss an output freeze.
Oil producers including Gulf OPEC members support holding talks next month on a deal to keep production at current levels, even if Iran declines to participate, OPEC sources said on Wednesday. A meeting would increase the likelihood of the first global supply deal in 15 years.
U.S. crude CLc1 was up 65 cents at $39.11 a barrel at 0452 GMT, having earlier risen as high as $39.38.
The contract settled up $2.12, or 5.8 percent, at $38.46 a barrel on Wednesday, erasing losses from the previous two trading days.
Brent crude LCOc1 rose 38 cents to $40.71, after finishing up $1.59, or 4.1 percent, at $40.33 a barrel on Wednesday.
“A smaller than expected gain in inventories in the U.S. also supported prices,” ANZ said in a morning note.
U.S. crude oil stocks rose last week to record highs for a fifth straight week, data from the Energy Information Administration showed on Wednesday.
Crude inventories USOILC=ECJ increased 1.3 million barrels in the week to March 11 to 523.2 million, a much smaller build than the 3.4 million-barrel increase expected by analysts.
The market is also rallying after a less hawkish U.S. monetary outlook, as the U.S. Federal Reserve held interest rates steady and indicated two rate hikes this year instead of the four expected.
Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside the Organization of the Petroleum Exporting Countries (OPEC) will meet in Doha on April 17 to discuss plans for a freeze in output.
The initiative was supported by around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil production, the minister said.
Since the freeze was first proposed last month, prices have recovered about 50 percent from decade-low levels but have been volatile without a firm date for a meeting.
Phillip Futures said it remains skeptical that anything more than a production freeze would be agreed.
“A production cut at this stage would likely be detrimental to the longer run,” Phillip Futures analyst Daniel Ang said in a note. “The need to cut out the more expensive forms of production is necessary, and thus, a premature support in prices could reset what has been done over the past two years.”