Following his remarks, crude oil tumbled more than four per cent on Tuesday and was lower in early trading yesterday.
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Oil prices have been thrashed for almost two years due to oversupply.
US crude stockpiles expanded by 3.5 million barrels through February 19, while supplies at the nation’s biggest oil-storage hub rose for a fourth week to a record 65.1 million barrels compared with a working capacity of 73 million. Venezuela reaffirmed a mid-March meeting of oil producers that would include Saudi Arabia, Russia and Qatar, to stabilize prices that have slumped 70 percent in a 20-month rout.
Brent crude futures were down 37 cents at US$34.04 a barrel at 1445 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 48 cents at US$31.67 per barrel.
A slowing global economy also risks hurting demand for oil and keeping prices very low.
In London, Brent North Sea crude for April delivery, the European benchmark, closed at US$35.29 a barrel, up 88 cents (2.6 per cent) from Wednesday’s settlement.
“It may be a little early to call it a trend but we are beginning to see some sign of cuts”, Spooner said, adding that USA output had fallen to about 9.1 million barrels per day, the same level as in October 2015. Inventories for all of the United States are at all-time peaks above 507 million barrels.
Oil prices could move back above $50 a barrel within a year as an OPEC initiative to freeze production gains support, and smaller producers go to the wall.
While all eyes were on Saudi Arabian oil minister Ali al-Naimi and his speech at the industry gathering IHS CERAWeek, in the US, his Iranian counterpart, Bijan Zangeneh, vehemently rejected any possibility of freezing its increasing oil output.
“The market continues to seesaw”, said Gene McGillian of Tradition Energy.
Oil has slid from more than 100 a barrel in mid-2014, pressured by excess supply and a decision by the Organization of the Petroleum Exporting Countries to abandon its traditional role of cutting production alone to boost prices.
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Mexico is willing to participate in a meeting with global producers to discuss a potential output freeze, Minister Coldwell said.
