Oil prices approach $40 amid hopes of a deal

Oil prices are continuing to rise on Monday with Brent crude pushing close to $40 a barrel for the first time this year.

The North American WTI crude benchmark rising the most, following news of US output reductions.

Brent crude futures increased by nearly 0.76 percent by Monday, reaching some of the highest levels since early January and standing at $39.48 per barrel by 06:20 GMT. WTI crude increased by 1.87 percent to $36.59 per barrel.

The rise in oil price comes after United Arab Emirates said it foresaw a “correction” in crude prices by the end of the year.

UAE,  an OPEC member has yet to receive an invitation to a possible meeting of oil-producing nations seeking to rein in a global supply glut, Energy Minister Suhail Al Mazrouei said.

Markets are poised to re-balance as many oil-producing assets outside the Organization of Petroleum Exporting Countries lose money at current prices, Al Mazrouei told reporters Monday in Abu Dhabi. Declining output at fields that need higher prices to break even is “good news” that points toward a more stable market, he said.

“I’m still optimistic that at the end of the year or before the end of the year we will see some correction,” Al Mazrouei said. “We need to be patient. It’s not happening in weeks or months. Correcting to a sustainable price will take time.”

Three OPEC members intend to meet with other producers in Russia on March 20 to renew talks on an agreement to cap oil output, Nigeria’s petroleum minister said last week. Saudi Arabia, Russia, Qatar and Venezuela agreed on Feb. 16 in Doha that they would freeze production, if other producers followed suit, in an effort to tackle oversupply. Benchmark Brent crude prices dropped 33 percent in the last year as OPEC boosted output in a fight for market share with higher-cost producers.

Brent crude prices plunged from $115 per barrel to $48.5 per barrel between June 2014 and January 2015, causing significant financial problems for many oil-exporting countries. The Brent crude benchmark has fluctuated between $30 and $35 per barrel since early January, rising above the $35-per-barrel mark in late February.