LONDON: Oil prices fell Tuesday, hitting one-month lows before recovering slightly, as hopes fade of producers reaching an agreement on curbing excess output levels.
Brent North Sea crude dropped to $37.27 a barrel and US benchmark West Texas Intermediate struck $35.24 a barrel -- the lowest points for four weeks.
Around 1130 GMT, Brent North Sea crude for delivery in June was down 12 cents to $37.57 a barrel compared with Monday's close.
West Texas Intermediate for delivery in May dipped 11 cents to $35.59 a barrel.
After breaking above $40 in March on expectations that upcoming Russia-Saudi Arabia-led talks would result in producers agreeing to limit oil output in the face of a global supply glut, the commodity has tumbled in recent weeks.
The April 17 Doha meeting aims to agree to cap output at January 2016 levels, but analysts say only a sizeable production cut can lead to a sustained recovery in prices.
Oil price losses were fanned Friday when Saudi deputy crown prince Mohammed bin Salman said his country would agree to limits at the gathering only if they were matched by Iran and other major producers.
"Crude oil is facing headwinds as Saudi Arabia hesitated to commit to freeze production," said Margaret Yang, analyst at trading group CMC Markets.
"This has brought down the market's expectation of what will be achieved in the long-awaited production freeze talk," she said.
But research house Capital Economics said in a client note that it was "too soon to give up on a Doha deal", adding that a "compromise agreement" was still likely even without Iran's full participation.
Iran crude production has surged since the West lifted nuclear-linked sanctions in January, with the country's oil minister saying Sunday that exports of the commodity had now passed two million barrels per day.
World oil markets have slumped from levels above $100 a barrel in mid-2014 as weak demand growth amid world economic strains contributes to the supply glut.
While recent losses have been stalled only by hopes over the possible output freeze, Capital Economics said that a "sustained recovery in oil prices would probably require outright cuts in global supply and increases in demand".
Comments
Comments are closed for this article.