On Tuesday’s early Asia trade, oil went down right after a great leap overnight. However, Brent is still $40 per barrel, on growing expectations for shrinking world supply.
In New York, oil futures for April delivery hit $37.50, just one percent decrease. As for May Brent in London, it traded $40.36, a 1.2% dip. By the way, Brent dared to break $40 overnight and found itself at the highest level since December.
Market sentiment keeps improving amid constant talks regarding an output freeze. As a result, more and more traders are closing their short positions.
Crude prices have soared steadily in recent weeks right after Venezuela, Saudi Arabia, Qatar and Russia came to a mutually beneficial compromise to freeze their output at January levels in order to back up prices. This month or next, a broader gathering among the OPEC members as well as non-OPEC countries is expected to take place.
Other upbeat signs driving the positive sentiment include the steady, though somewhat slow, reduction in American crude output as well as the number of active oil rigs in America.