Global benchmark Brent crude futures extended gains on Friday to put them on track for a weekly rise of over 6 percent, boosted by hopes of a deal among oil-producing countries to tackle a growing supply glut.
Brent futures have jumped over 25 percent since their January low and are heading for their fourth straight session of gains.
Brent had risen 31 cents to $34.20 a barrel by 0130 GMT, after ending up 79 cents, or 2.4 percent, at $33.89.
U.S. crude climbed 21 cents to $33.43 a barrel, having settled up 92 cents, or 2.9 percent, at $33.22.
“Despite the unlikely scenario of supply cutbacks in the oil market, prices have found some support above $30 a barrel. We believe this basis is fragile, with fundamentals expected to weaken in the coming weeks,” ANZ said on Friday.
“We think the likelihood of an agreement between producers is extremely low. In the absence of a supply cut, there is further downside risk to prices in the short term.”
Brent futures rallied as much as 8 percent after Russia said on Thursday that OPEC’s largest producer Saudi Arabia, had proposed oil production cuts of up to 5 percent in what would be the first global deal in over a decade to help clear a glut of crude and prop up sinking prices.
“We remain highly sceptical that such a meeting will result in credible cuts in supply; thus, we see this as nothing more than an attempt to shift market sentiment, and we do not expect that it will change the physical market imbalance,” Barclays said, referring to meetings between OPEC members and Russia.
“In our view, the price path implied by our forecasts, of Brent trading less than $40 a barrel for at least two quarters, is required for the balancing process to take place, paving the way for a more sustainable increase in prices.”
Edison Investment Research has also reduced its 2016 oil price forecast to $40 a barrel from $60.
“The oil markets have been in turmoil now for 16 months, with January 2016 trading the most tumultuous we have seen in years,” said Edison analyst Ian McLelland.
“Crude prices have plummeted to levels not seen since mid-2004 and both slowing Chinese demand growth and Iranian exports are weighing heavily on the market.”
The rebound in the oil market lifted share prices on Wall Street and other stock markets in another rollercoaster session.