Brent oil prices surged past the $37-mark on Tuesday, soaring to $37.25 a barrel intra-day as the proverbial tide in commodities sentiment seems to have turned positive.
The global benchmark of Brent crude had tumbled to as low as $27.67 on January 18, a 13-year-low.
In the 50 days since then, the price has surged by more than 34.6 per cent, bringing sanity to the global oil market that was marred by a glut in the commodity.
Yesterday, the contract for a barrel of West Texas Intermediate (WTI) settled at $34.40, a one-month high.
WTI had slipped to a 13-year-low of $26.21 a barrel on February 11, and that benchmark is up more than 31 per cent from those levels in less than three weeks.
Industry data showing a massive build-up in US crude stockpiles on Wednesday dampened sentiment a little, with Brent crude slipping 10 cents at $36.71 a barrel by 8.27am UAE time. The contract for May delivery settled up 24 cents the previous day.
“Sentiment has clearly shifted for commodities in the last fortnight,” ANZ bank said on Wednesday. “Both crude oil and iron ore prices hit a one-month high overnight. The price action in oil adds to the case that the bottom in the crude oil market is now in place.”
Crude prices were supported by UAE Energy Minister Suhail bin Mohammed Faraj Faris Al Mazrouei’s remarks urging Opec and non-Opec producers to hold their production at January levels to stabilise global oil markets.
In addition, Russian Energy Minister Alexander Novak said that oil firms in the country support a pledge to average production this year at January’s levels but did not support any proposals to cut oil production.
Oil prices began rallying mid-February after major oil exporters Saudi Arabia and Russia agreed to keep production levels constant at January levels in a bid to put a floor under the rapidly sinking global oil price.
The proposal, announced by Saudi, Russian, Qatari and Venezuelan oil ministers after a meeting in Doha, also has the UAE’s approval.