Oil Price - April 12

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Oil prices are ripping higher on Tuesday morning after reports that Saudi Arabia and Russia have reached a deal to freeze crude production levels.

Interfax cites unnamed sources in reporting an agreement was reached regardless of Iran’s cooperation, a sticking point in recent weeks. At issue is a pact to freeze crude output at January or February levels, in a bid to boost prices.

Stuff like this sends the speculators who have shorted oil futures contracts running for cover. They have their stop loss orders set tight, so when the price of oil moves it triggers a lot of buy orders.

IEA's monthly Oil Market Report is due this week. Hopefully, it will contain more evidence of production declines in the Non-OPEC countries. No doubt that the big drop in the U.S. active rig count since IEA's last report will draw some comments.

EIA's weekly inventory report comes out on Wednesday. April is when refiners draw more crude oil from storage as they ramp up gasoline production. IEA has been forecasting a BIG increase in demand for gasoline and diesel coming this summer.

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Bloomberg reported that Kremlin spokesman Dmitry Peskov said in a message that "there is hope" for an agreement regardless of Iran.

Iran had said it would not join a production-cut agreement, as it tries to boost output for export now that economic sanctions have been removed.

A meeting between OPEC and non-OPEC producers will hold in Doha on Sunday, and an agreement could be reached then.