Oil falls as dark clouds appear ahead of producer meeting
Oil fell on Thursday as the International Energy Agency trimmed its forecast for demand growth and on signs that a producers` meeting this weekend will not yield a concrete plan to reduce oversupply.
London: Oil fell on Thursday as the International Energy Agency trimmed its forecast for demand growth and on signs that a producers` meeting this weekend will not yield a concrete plan to reduce oversupply.
The International Energy Agency slightly trimmed its estimates for 2016 global demand growth from last month to 1.16 million barrels per day and said a deal to freeze oil production by OPEC and non-OPEC producers will have a limited impact on global supply.
This came a day after OPEC cut its forecast for demand growth and warned of further reductions.
Brent crude futures were down 54 cents from their last close at $43.64 a barrel by 0827 GMT. US crude was down 47 cents at $41.29 a barrel.
The world`s biggest oil producers, including Saudi Arabia and Russia, are scheduled to meet in Qatar on Sunday to finalise a deal reached in February to freeze oil output at January levels, aiming to bolster oil prices.
However, Russian oil minister Alexander Novak told a closed-door briefing of energy analysts in Moscow on Wednesday that the deal would be loosely framed with few detailed commitments.
"The agreement will not be very rigidly formulated, it is more of a gentlemen`s agreement," one of those present said, paraphrasing Novak`s words at the briefing.
"There is no plan to sign binding documents," another person at the briefing present said.
This suggests producers are unlikely to formally agree to rein in production, which now stands at around 2 million barrels per day (bpd) in excess of demand.
"It`s not going to be an agreement, but a declaration of intent to say that if everything goes well we`ll keep production at January levels," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.