U.S. oil futures surged to 30-day highs on Friday, fueled by news of fresh discussions over a potential production cut by major oil exporters, but gains were expected to remain subdued as worries over a global supply glut lingered.
U.S. crude futures for April delivery went up 0.94% on Friday, hitting one-month highs of $33.41 per barrel.
On the ICE Futures Exchange in London, the Brent contract for April delivery spiked 1.16% to trade at $35.72 a barrel. Analysts believe the rise in the price of the international oil benchmark is driven by short positions being closed ahead of the contract’s expiry next week.
Oil prices trended up on Friday after reports of an upcoming meeting involving Saudi Arabia, Qatar, Venezuela and Russia surfaced. The four oil-producing countries will reportedly meet next month to discuss the details of the oil freeze agreement.
The positive mood which resulted in a rise in oil prices quickly turned sour, limiting gains as worries over a global supply glut were renewed after data released on Wednesday revealed that U.S. oil stockpiles rose to an all-time high last week.
Oil futures have been down approximately 70% since the summer of 2014 as global crude production continues to overwhelm market demand following a boom in U.S. shale oil.
The situation was exacerbated after the Organization of the Petroleum Exporting Countries (OPEC) decided, last year, to increase output instead of cutting back production in a move to protect market share.