NEW YORK, Feb. 17 (UPI) -- Crude oil prices soared in Wednesday trading as petroleum ministers reviewed productions levels in Tehran, even as Iran maintains defense of its market share.
Iran hosted ministers from Venezuela, Iraq and Qatar to review production levels one day after Saudi Arabia and Russia said they'd freeze production to January levels if others followed suit.
Crude oil prices dropped from $35 per barrel in overnight trading before the Tuesday open on Wall Street to settle at around $32 for Brent. With markets seeing the meetings as a tacit agreement that prices need a level of control, oil staged a major rally in early Wednesday trading.
Brent crude oil opened higher by about 4 percent to start the day at $33.53 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, moved in parity with Brent to start the trading day at $30.20 per barrel, breaking out of the $20 range for the first time this week.
The January freeze will do little to pull markets sharply way from the supply side, so Wednesday's surge in prices may be a psychological reaction to the meetings in Tehran. Mehdi Asali, the Iranian envoy to the Organization of Petroleum Exporting Countries, was quoted in Iranian media as saying that, with sanctions pressures easing in response to July's nuclear agreement, asking Iran to hold steady was "illogical."
Wednesday's rally got minor support from data from the U.S. Federal Reserve, which in the past said the low price of crude oil may throttle economic momentum. The Federal Reserve said there were small gains in manufacturing output for January, against a static mining sector.
"Industrial production increased 0.9 percent in January after decreasing 0.7 percent in December," the Fed said. "A storm late in the month [in eastern U.S. states] likely held down production in January by a small amount."