World oil prices to increase from April

An oil analyst here said that the price of a barrel of oil which had plunged from 16 dollars in November to 10 dollars, may go up by a dollar in trading immediately. He said that the decision by major oil producers to cut production was a strongly bullish development especially for oil exploration companies.

He, however, added that the extent of price recovery would depend on the producers’ ability to stand by their agreement to cut up to two million barrels a day (BPD) from the world market

The meeting in Riyadh over the weekend between OPEC producers Saudi Arabia and Venezuela and non-OPEC Mexico reached an agreement to co-ordinate with other producers to withdraw a total of 1.6 to 2.0million barrels daily from the 75 million BPD global market.

Iran and the United Arab Emirates have agreed to cut down a combined 265,000 barrels from their daily production. In Tehran, oil minister Bijan Namdar Zanganeh said Iran would cut production by 140,000 barrels. Both Iran and UAE said the cuts would start from April 1.Analysts said the agreement will help repair the damage done to oil markets by the OPEC when it raised membercountry supply limits.