Oil prices forecast to rise to $40 per barrel

Sentiment has improved, and US production is slowing

Oil prices are on the rise, gains in Asia, strong US job growth announced on Friday, and a decrease in drilling in the US have helped prices to rebound.

In the US the West Texas Intermediate increased by 67 cents (1.87%) to $36.59 while Brent crude futures increased by 75 cents to $39.42 a barrel.

This indicates that oil prices will hang in the mid-30s and move closer to $40 in the coming weeks.

US production fell for the 11th straight week to the lowest rate since December 2009 as producers felt the squeeze.

Saudi Arabia, Russia, Qatar and Venezuela agreed in mid-February that they will freeze output if other producers agree to follow suit. This would be the first agreement between OPEC and non-OPEC producers in 15 years.

Nigerian representatives said last week that a number of key oil producers will meet later in March to discuss the proposed output freeze agreement with Russia.