Limited gains seen in oil prices

Dubai: Analysts are expecting limited gains in crude prices this week.

On Friday, Brent for May settlement rose $1.65 (Dh6), up 4.5 per cent, to $38.72 a barrel on the London-based ICE Futures Europe exchange.

”Sentiment is improving generally on risk assets, hence we’ve seen a good performance in equity markets in recent weeks and this risk-on tone is benefiting oil too. But the data on the fundamentals side of the market continues to paint a very bearish picture so while we still expect prices to rise this year, the kind of gains are likely to be mild,” Edward Bell, commodities analyst with Emirates NBD told Gulf News.

Bell expects volatility to persist in oil. He does not expect a cut in oil production in the next March 20 meeting of Opec and non-Opec producers. Emirates NBD expects oil prices to average at $39 in 2016.

Oil is still down 3 per cent this year on speculation a global glut will be prolonged amid brimming US stockpiles and the outlook for increased exports from Iran after the removal of sanctions. Opec members and Russia may meet to discuss capping output later this month, Nigeria’s petroleum minister said. Saudi Arabia, Russia, Qatar and Venezuela agreed on February 16 in Doha that they would freeze output if other producers followed suit in an effort to tackle the oversupply.