Crude oil for April delivery on the New York Mercantile Exchange shed 64 cents, or 2.01%, to trade at $31.23 a barrel by 08:00GMT, or 3:00AM ET.
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He added: “There is no sense wasting our time seeking production cuts”. Fundamental contributions to this historic supply-demand imbalance include record Saudi Arabia, United States and Russian Federation production as well as the economic slowdown in China – the second largest consumer of crude oil.
Saudi Arabia delivered its starkest message yet to a reeling global oil sector, saying it wouldn’t rescue the industry from low prices by cutting its production, the Wall Street Journal reports.
The country simultaneously said that it had started to ship oil cargoes – each with a volume of several million barrels – to worldwide clients.
“This is more like a joke that they tell us they would freeze their production above 10 million barrels per day and that we should also in turn freeze our production at one million”, Bijan Zangeneh, Iranian oil minister, said on Tuesday. On the homepage of Marketwatch.com there are no less than 6 articles on the effects of the tumbling prices of oil.
A slowing global economy, which Citi said would grow by just 2.5 per cent this year compared to a previous forecast of 2.7 per cent, also weighed on Brent, traders said.
“Overall, this week’s data point will do very little to offset the Saudi’s oil minister throwing cold water on production cuts any time soon”, said Chris Jarvis, an analyst at Caprock Risk Management, referring to Tuesday’s comments by Ali Al-Naimi that the kingdom did not intend to reduce oil output.
Russian Federation and Saudi Arabia, who are the biggest oil exporters had proposed to freeze output levels in January.
Iran’s crude export in February reached 1.4 million barrels per day (mbpd), Ghamsari said, forecasting that the figure will stand at 1.5-1.56 mbpd by March.
Oman’s Oil Minister Mohammad bin Hamad bin Saif al-Rumhi said sanctions have harmed Iran’s exports and the country had a right to increase output. In addition, EIA is expecting a significant cut in the US production, with shale production to decline by 60,000 barrels per day this year, and a decline of 200,000 barrels per barrel day next year.
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“They freeze production at 10 million bpd and we freeze at 1 million bpd”.
