(Ecofin Agency) - Oil rose more than $42 a barrel on Friday, reaching its highest this year driven by hopes of a production freeze by major oil producers in April.

Brent crude was at 77 cents at $42.31 a barrel having reached a 2016 high of $42.40. U.S. crude was at 84 cents to $41.04 a barrel after increasing as high as $41.13, Reuters reports.

According to Francis Perrin (photo), the Chairman of Strategy and Energy Policy and the Editor of OAG Africa, there has been stability in the global market but there is no assurance that it will last.

“As always oil prices are fluctuating but there has been some stability in the recent period with Brent prices around $40 per barrel. There is of course no guarantee that it will last. The very strong fall in oil prices between the summer of 2014 and January 2016 had for some time a rather positive impact in macroeconomic terms as the oil exporting countries are a minority among the countries in the world. This fall was positive for the trade and payment balances of oil importing countries as well as for their economic growth. But when oil prices fell at very low levels there was some concern in economic circles about the risks of deflation, of destabilization of several oil producers, of severe financial problems for the oil industry and of difficulties for banks and financial institutions due to their loans to oil companies,” he told Agence Ecofin.

Saudi Arabia and non-OPEC producers led by Russia are to meet on April 17, in Doha to agree on the first global supply deal in 15 years so as to bolster oil prices in the global market. While some analysts advised caution after the strong gains, some think the deal to freeze output is not enough.

“A freeze agreement is not enough. It would be important to reduce world oil supply but it does not seem to be the most likely option in a short-term perspective. On the demand front the world trend remains positive as the oil consumption of emerging and developing countries will go on increasing over the next few years. The oil demand of OECD countries is flat or declining but the weight of non-OECD countries is now very important and they will push up world oil demand in 2016 (probably by 1.2 million barrels per day) and in the following years, at least until the end of this decade. This movement will contribute to the rebalancing of the market and to the future rise in oil prices,” Perrin added.

Anita Fatunji