Oil up 3 percent on March producers meeting, U.S. project delays

Thu Feb 25, 2016 3:46pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Crude oil futures jumped 3 percent on Thursday, reversing earlier loses after confirmation of a meeting of major producers and news of project delays and job cuts in the industry.

Venezuela reaffirmed a mid-March meeting of oil producers that would include Saudi Arabia, Russia and Qatar, to stabilize prices that have slumped 70 percent in a 20-month rout.

The four countries are involved in an effort to get oil producers in the Organization of the Petroleum Exporting Countries and elsewhere to freeze production at January's highs. Many traders believe an output cut and not freeze is what the market needs to clear the global crude glut.

"It's the Venezuela headline that got the market excited enough to rebound, though it's baffling why as everyone knows of this meeting and that it's not going to achieve anything," said John Kilduff, partner at Again Capital, a New York energy hedge fund.

U.S. crude futures CLc1 settled up 92 cents, or 2.9 percent, at $33.07 a barrel. It had slid more than $1 at the session low.

Brent crude futures LCOc1 finished up 88 cents, or 2.6 percent, at $35.29 a barrel, hitting a three-week high. It had also dropped more than $1 earlier.

The rally in crude also boosted gasoline futures RBc1, which settled up nearly 5 percent after rallying from early in the day on strong demand for the motor fuel. USOILG=ECI

Aside from the March meeting, traders said sentiment in oil was helped by project deferments in the U.S. shale industry and job cuts that will slow production.   Continued...

Pump jacks are seen at the Lukoil company owned Imilorskoye oil field, as the sun sets, outside the West Siberian city of Kogalym, Russia, January 25, 2016.  REUTERS/Sergei Karpukhin