Brent dropped for a second day as Russia signalled Iran won’t join major producers in freezing output to manage a global glut.
Futures lost as much as 1 per cent in London after falling 2.1 per cent Monday. Iran has “reasonable arguments” for not joining an alliance to cap production now, Russian energy minister Alexander Novak said after meeting with his Iranian counterpart. Talks on the freeze are most likely to occur in Qatar’s capital Doha next month, according to Gulf Opec delegates. US stockpiles probably expanded last week, keeping supplies at the most since 1930.
“Supply is still the key factor for the market,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “If there is a meeting and it does result in a decision on definitive action, that will be positive for prices, but history is against anything happening,”
Oil has rebounded after slumping to a 12-year low this year on speculation stronger demand and falling US output will ease a surplus. Iranian production increased last month by the most in almost two decades following the end of international sanctions, Opec said in its monthly report Monday. Supply from Saudi Arabia was mostly unchanged.
Brent for May settlement declined as much as 39 cents to $39.14 a barrel on the London-based ICE Futures Europe exchange and was at $39.19 at 1.13pm Hong Kong time. The contract slid 86 cents to $39.53 on Monday. The global benchmark was at a premium of 66 cents to West Texas Intermediate for May.
WTI for April delivery lost as much as 33 cents, or 0.9 per cent, to $36.85 a barrel on the New York Mercantile Exchange. The contract fell $1.32 to $37.18 Monday. Total volume traded was about 17 per cent below the 100-day average.
No countries have received invitations or an agenda for a meeting in Doha, said four Opec delegates, who asked not to be identified because the matter isn’t public. The Qatari capital is one option as a location for the talks, said Russia’s Novak at the Russian embassy in Tehran, adding that he hopes Iran’s oil minister Bijan Namdar Zanganeh will participate.
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