published Apr 5th 2016, 7:58 pm, by Ben Sharples

(Bloomberg) —
Oil extended gains for a second day after Kuwait said a deal to freeze output can be reached without Iran and U.S. industry data showed crude stockpiles declined.

Futures rose as much as 2.7 percent in New York after climbing 0.5 percent Tuesday. Brent in London gained. Major producers have no option but to reach an agreement to cap production when they meet April 17 and a freeze may set a price floor, according to Kuwait’s OPEC governor Nawal al-Fezaia. U.S. crude inventories dropped by 4.3 million barrels last week, the American Petroleum Institute was said to report.

“Oil is going to be very volatile in the lead up to the meeting,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “It’s so uncertain as to whether a deal is going to be reached. The API numbers are probably more bullish for the market.”

Oil has swung between gains and losses since Friday amid speculation about whether an agreement can be reached at the meeting in Doha. Saudi Arabia will only cap production if it’s joined by other major producers including Iran, which is pumping crude at the fastest pace in almost four years, the kingdom’s deputy crown prince said last week.

West Texas Intermediate for May delivery increased as much as 95 cents to $36.84 a barrel on the New York Mercantile Exchange and was at $36.78 at 8:44 a.m. Hong Kong time. The contract rose 19 cents to $35.89 on Tuesday after falling 6.9 percent the previous two sessions. Total volume traded was more than double the 100-day average.

Brent for June settlement climbed as much as 70 cents to $38.57 a barrel on the London-based ICE Futures Europe exchange. The contract added 18 cents $37.87 on Tuesday. The global benchmark was at a 64 cent premium to WTI for June.

–With assistance from James Paton. To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Aaron Clark, Iain Wilson