Oil losses deepen on doubts over output freeze deal
World oil prices fell further today on doubts over a consensus between producer nations to limit output in an oversupplied market, dealers said.
London: World oil prices fell further today on doubts over a consensus between producer nations to limit output in an oversupplied market, dealers said.
At around 1700 GMT (2230 IST), US benchmark West Texas Intermediate (WTI) for delivery in April dived USD 1.71 to USD 36.79 per barrel.
Brent North Sea crude for May delivery sank USD 01.27 to USD 39.12 a barrel compared with Friday's close.
Oil had rallied Friday after the International Energy Agency said that after the market's 20-month long rout, there were signs prices may have "bottomed out".
However, prices hit reverse gear today after Iran reportedly announced over the weekend that it would not join a proposed output freeze by crude producers.
Sentiment took another hit from the stronger dollar, weak Chinese industrial output, and a gloomy market assessment from the Organization of Petroleum Exporting Countries (OPEC).
"It has been a combination of factors: comments from Iran's oil minister, OPEC forecasting a bigger surplus, weaker Chinese industrial data and a rebounding dollar," said analyst Fawad Razaqzada at trading firm City Index, when asked about the latest oil price losses.
"But the short-term trend for oil is still bullish, though Brent needs to hold above key support at USD 39 a barrel or we could see a more pronounced correction."
A meeting of oil producers to discuss a global deal to freeze production levels will likely take place in April, Russian energy minister Alexander Novak said today.
However, he also acknowledged that Iran might not be included.
"The place and time of a meeting of oil-producing countries is being discussed. It will probably be held in April," Interfax news agency quoted Novak as saying.
Novak said earlier this month that a meeting of OPEC members and other oil-producing countries could be held between March 20 and April 1.
Four major oil producers -- Russia, Saudi Arabia, Venezuela and Qatar -- said last month they were ready to freeze their output at January levels if other oil-producing countries joined their initiative.
Oil prices, which have plummeted more than 60 per cent since mid-2014 partly because of oversupply, have recently recovered slightly on talk of an output freeze.
Novak said that Iran could be excluded from the deal in order to allow it to increase its crude production after Western sanctions over its nuclear programme hindered its access to the global oil market.
Tehran is reported to have said over the weekend that it would join a planned meeting between producer giants on output only after its output has reached pre-sanction levels of 4.0 million barrels per day.