LONDON – Oil fell on Monday after Iran dashed in regards to a coordinated production freeze soon, returning bearish sentiment for that market on the supply glut that has sent prices crashing.
Global benchmark Brent crude futures fell back below US$40 a barrel, trading at US$39.70 at 1128 GMT, down 69 cents US or 1.7 percent on Friday’s close. Brent hit a 12-year low of US$27.10 in January.
U.S. crude was down 82 cents US at US$37.68 a barrel.
“Oil is down because Iran said they’d only join the output freeze group once they reached creation of 4 million barrels every single day (bpd),” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Iran’s oil exports derive from reach 2 million bpd inside the Iranian month that ends on March 19, up from 1.75 million in the last month, oil minister Bijan Zanganeh said on Sunday.
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Zanganeh poured cold water on wants a quick deal on freezing production, saying the OPEC member would join discussions only once its output reached 4 million bpd. Zanganeh is to meet his Russian counterpart Alexander Novak in Tehran on Monday, according to news agency reports.
Saudi Arabia seemed to have associated with a preliminary cope with another producers to freeze output, becasue it is crude production held steady in February at 10.22 million bpd, an industry source told Reuters.
OPEC members and non-OPEC producers will probably hold their next meeting to speak about an output freeze in mid-April in Doha, OPEC sources told Reuters.
A March 20 meeting in Russia, that was a part of an early on plan, now looks unlikely.
Worries about demand fundamentals moved the main attraction as investment bank Morgan Stanley warned that the slowing global economy and high production would prevent any sharp rises in oil prices.
“Oil prices are in possession of the signs and symptoms of bottomed, when they will probably stay subdued throughout this year before beginning to maneuver higher in 2017,” the U.S. bank said within the research note. It added that cheap oil hadn’t provided the boost to growth that lots of had envisioned.
“When oil costs are falling below production costs, the wages gains for consumers will likely be small compared to the expense to producers, and falling oil prices be described as a negative-sum game,” it said.
? Thomson Reuters 2016
