After falling by close to 7% to under $40 per barrel in the wake of the failure of Sunday’s meeting of major oil producers to agree on production quota levels, the price of oil recovered steadily through the day yesterday to close just under its pre-Doha price of $43per barrel in New York last night.
Most Western stock markets were slightly higher when they finished trading as a result, including the FTSE 100 Index in London which is heavily populated by energy and mining stocks.
A number of Asian markets closed at their highest levels for over a month overnight on the back of the stabilised oil price.
A number of reasons are being cited for the current oil price trend: A strike in Kuwait, temporarily reducing production; reduced shale production in the US; and the realisation that agreement was unlikely to be reached in Doha anyway given Iran’s aim to get to pre-sanction production levels of 4m barrels per day.
Oil prices have been on the rise, recovering from a low of $30 a barrel in mid-January as Qatar, Russia, and Saudi Arabia have led efforts to freeze prices.
