Oil up 6 percent as producers set meeting, Fed seen less hawkish

Wed Mar 16, 2016 4:16pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - U.S. oil prices jumped almost 6 percent on Wednesday, erasing losses of the past two days, after major producers firmed up plans to meet in Qatar to discuss an output freeze and U.S. crude stockpiles grew less than expected.

The market also rallied on a less hawkish U.S. monetary outlook, after the U.S. Federal Reserve held interest rates steady and indicated two rate hikes this year instead of the four expected.

"Easy money is always good for commodities and the Fed gave oil bulls yet another excuse to push crude prices higher," said John Kilduff, partner at New York energy hedge fund Again Capital.

U.S. crude CLc1 settled up $2.12, or 5.8 percent, at $38.46 a barrel. It had fallen 5 percent in the past two sessions.

Brent crude LCOc1 finished up $1.59, or 4 percent, at $40.33 a barrel.

Crude prices got a heady start after Qatari oil minister Mohammed Bin Saleh Al-Sada said producers from within and outside the Organization of the Petroleum Exporting Countries will meet in Doha on April 17 to discuss output freeze plans.

Around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support the initiative, the minister said.

Since the freeze was first proposed last month, prices have recovered about 50 percent from decade-low levels but been volatile without a firm meeting date.   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