Oil price rose above $42 a barrel on Friday, hitting its highest this year and extending a rally into a fourth week on expectations of a production freeze by major exporters.
Brent crude’s front-month contract LCOc1 was up at $42.44 a barrel while U.S. crude CLc1 gained 84 cents to $41.04 a barrel after rising as high as $41.13.
Media reports indicate that the benchmark had jumped by 4.5 per cent to close the previous session at $40.20.
We are leaving the period of low demand and starting to move toward the period when demand increases over the summer.
Oil prices have surged by more than 50 per cent from 12-year lows reached in December.
The rise is bolstered as the Organisation of Petroleum Exporting Countries (OPEC) floated the idea of a production freeze, boosting Brent from about $27 and U.S. crude from around $26.
Leadership reports that some analysts think there is still steam in the rally.
“We are leaving the period of low demand and starting to move toward the period when demand increases over the summer,” said Olivier Jakob, oil market analyst at Petromatrix at Zug in Switzerland.
He added that the massive oil glut that had helped to hammer prices last year appears to be stabilising. “We’re moving towards looking at an old surplus, rather than a new one being built up,” he said, adding that it is likely that Brent will stabilize around $40.”
Some analysts have also attributed the dollar weakness as a contributor to the lift in oil. The dollar index is down 3.2 per cent so far this month.