Oil prices hit their 2016 highs Thursday, Reuters reports.
US crude surged 5 percent to pierce the US$40 a barrel barrier on optimism major producers will strike an output freeze deal next month amid rising crude exports and gasoline demand in the United States.
A weaker US dollar after the US Federal Reserve indicated Wednesday there will be two US interest rate hikes this year instead of four also drew oil buyers that use currencies such as the euro.
Organization of the Petroleum Exporting Countries kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in Doha, Qatar, to try to achieve the first global supply deal in 15 years.
“The remote possibility that a coordinated supply control effort comes from this meeting, assuming it even happens, has put market bears on the defensive,” Pete Donovan, a broker with Liquidity Energy in New York, was quoted as saying.
Oil prices have surged more than 50 percent from 12-year lows since OPEC floated the idea of a production freeze.
“For now, the market is staying well supported,” Olivier Jakob, an oil analyst at Petromatrix, was quoted as saying. “It will be difficult to return to the lows of the year.”
US crude inventories climbed last week to the fifth straight week of record highs but by just 1.3 million barrels, government data showed, a much smaller build-up than forecast.
Gasoline demand in the US rose 6.4 percent over the past four weeks from the same period a year ago.
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