Oil holds on to 10-week high as production freeze weighed against US stockpile record

A worker checks a valve of an oil pipe at the Lukoil company owned Imilorskoye oil field outside Kogalym, Russia, on Jan 25, 2016.
A worker checks a valve of an oil pipe at the Lukoil company owned Imilorskoye oil field outside Kogalym, Russia, on Jan 25, 2016. PHOTO: REUTERS

HONG KONG (Bloomberg) - Oil held its advance to the highest close in more than 10 weeks as speculation producers may agree to an output freeze competed with forecasts that US stockpiles would remain at the most since 1930.

Futures were little changed in New York. West Texas Intermediate added 5.5 per cent Monday while Brent rose above US$40 for the first time since December.

Latin American producers will meet on Friday to discuss "the issue of oil prices," according to the Ecuador's foreign ministry.

US inventories are forecast to have increased 3.5 million barrels last week, according to a Bloomberg News survey before a government report Wednesday.

Crude capped a third week of gains Friday, the longest run since May, as US crude output slid to the lowest level since November 2014.

A meeting among major producers to discuss freezing output may be held in Russia, Doha or Vienna sometime between March 20 and April 1, Russian Energy Minister Alexander Novak said on state television last week.

WTI for April delivery was at US$37.84 a barrel on the New York Mercantile Exchange, down 6 cents, at 8:29 a.m. Hong Kong time.

The contract gained US$1.98 to US$37.90 on Monday, the highest close since Dec 24.

Brent for May settlement climbed US$2.12, or 5.5 per cent, to US$40.84 a barrel on the London-based ICE Futures Europe exchange on Monday, the highest close since Dec 4.