Why Is The Apr. 17 OPEC/Non-OPEC Producer Meeting Such A Big Deal?

Crude oil prices are soaring on Wednesday after several major news events boosted investor confidence in the outlook for oil prices. The piece of news that could have the largest potential near-term impact on oil prices is that Qatar’s Minister of Energy & Industry has announced OPEC will be meeting with the other leading global oil producers Doha on April 17 to discuss a potential output freeze.
 

Producers accounting for up to 73 percent of global oil output will reportedly be supporting an output freeze, which was first proposed in February.
 

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Oil prices have rebounded more than 50 percent from their lowest point of the downturn earlier this year, but remain extremely depressed due to a massive global crude oil supply glut. A production freeze among all the major producers would be a huge step toward the re-balancing of the oil market, and investors now have a firm meeting date to look forward to.

In other bullish oil news, the most recent U.S. crude oil inventories number from the Energy Information Administration (EIA) came in 2.1 million barrels lower than consensus expectations. Inventory levels still hit a new record high at 523.2 million for a fifth consecutive week.

Despite a 3.3 percent Wednesday gain, the United States Oil Fund LP (ETF) USO remains down 8.9 percent year-to-date.

Disclosure: the author holds no position in the stocks mentioned.