Crude-oil prices on Monday fell but traded off the day’s lowest levels after key producers failed to agree on a production cap that could have tightened up supply.
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Brent settled down 19 cents, or 0.4 per cent, at US$42.91 (RM167.13) a barrel.
Oil prices hit a 12-year low in January, The Associated Press notes, falling beneath $30 a barrel.
Ministers from some members of the Organization of Petroleum Exporting Countries joined their non-member counterparts in Doha during the weekend to consider a measure to freeze production at January levels in order to stabilize crude oil prices.
European stock markets have recouped most of their earlier losses as oil prices clambered off lows.
The key driver behind the breakdown was Saudi Arabia’s refusal to participate in the deal without its geopolitical rival Iran pledging to do the same.
Oil prices are trading sharply lower but have recovered a chunk of the losses they recorded in the immediate aftermath of the failure by oil-producing countries to agree Sunday on freezing production. Some have even gone bust.
The failure to reach a consensus on freezing production to support prices came after Iran opted against attending the meeting of 18 oil-producing nations in Qatar.
“Now it is a question of speed to see if the rate of US production decline can offset the growth in OPEC production”.
The IEA noted signs that “the much-anticipated slide in production” of shale oil in the United States “is gathering pace”.
Lower potential USA supply is one of the reasons why oil prices have rallied in the past two months alongside expectations of some sort of deal emerging at the meeting in Doha.
Novak, the Russian energy minister, said late on April 17 that Moscow will watch the positions of OPEC member countries and see “whether they are able to reach agreement between themselves that they all must take part in the freeze of oil production”.
While any agreement was not expected to accelerate the rebalancing of oil markets, analysts warned crude will remain under pressure as the possibility of coordinated action among OPEC and non-OPEC producers to rein in production has faded. “We believe oil prices will rise to a sustainable level closer to $60, the new normal, not $100 and not $40 either”.
The market volatility appears driven in part by speculative investors, “oil tourists” who drive the price up and down on expectations about things like the Doha meeting, said Kit Juckes, a strategist at bank Societe Generale.
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The cheap oil price has a huge impact on the economies of crude-producing countries, particularly the poorer ones like Angola, Nigeria and Venezuela. The weekend meeting collapsed after Saudi Arabia expressed reluctance to more forward without Iran’s participation.
