Oil prices extend gains

A weaker dollar helped also to lift demand for the commodity priced in the greenback.

US benchmark West Texas Intermediate for delivery in April was up 49 cents at $36.41 per barrel.

Brent North Sea crude for May delivery climbed 42 cents to $39.14 a barrel compared with Friday’s close.

Prices had rallied Friday on the back of sliding US production and after the US Labor Department reported that the world’s top economy added a robust 242,000 jobs in February.

“There was a bit of a double-win. On the one hand we had strong US jobs growth but on the other hand, we had lower wage growth and therefore, a weaker US dollar,” Ric Spooner, chief market analyst at CMC Markets in Australia, told AFP.

“There’s an ongoing… momentum in commodity prices generally and oil is part of that,” he said Monday.

Bloomberg News reported that US drillers have slashed the number of active rigs to their lowest level in more than six years.

However, analysts say that for an even greater gain for battered commodity prices there need to be production cuts in the Organization of the Petroleum Exporting Countries (OPEC).

“We’re a long way away from any production cut agreement. The market did react to the initial (announcement of) meetings but since then there hasn’t been much to give markets any encouragement,” Spooner said.

Saudi Arabia, Russia, Qatar and Venezuela agreed on February 16 in Doha that they would freeze output if other producers followed suit.

African oil kingpin Nigeria said last week key crude producers plan to meet in Russia later this month to discuss the proposed output freeze.

“The oil markets will continue to watch closely the negotiations with other OPEC producers, and economic data coming out of China and the eurozone,” said EY analyst Sanjeev Gupta.