Oil prices dipped in Asia today after mounting a strong rally the day before as traders remain doubtful that talks on an output freeze among key crude producers will lead to an agreement.
US crude rose back above USD 30 a barrel and European benchmark Brent climbed well over USD 34 yesterday on hopes that the discussions would lead to concrete action to stabilise the battered market.
But today, US benchmark West Texas Intermediate (WTI) for delivery in April, a new contract, was down 41 cents, or 1.23 per cent, at USD 32.98. Brent for April dropped 43 cents, or 1.24 per cent, to USD 34.26 a barrel.
“Yesterday’s increase could have come mainly from OPEC trying to rally the market into thinking that there will be action to come between OPEC and non-OPEC producers,” Phillip Futures analyst Daniel Ang told AFP, referring to the discussions on a possible production freeze.
“But without any concrete action, I continue to believe that prices shouldn’t be going upwards and this is reflected in the price drops.”
Muhammadu Buhari, the president of Nigeria, Africa’s biggest oil producer, began a week-long visit to the Gulf on Monday stumping for relief from falling prices.
His trip started in Saudi Arabia, where he was to meet with King Salman bin Abdulaziz and senior Saudi officials. Saudi Arabia is the biggest producer in the 13-nation Organization of the Petroleum Exporting Countries.
Poorer OPEC members like Nigeria and Ecuador have been clamouring for a cut in production in a bid to stabilise prices, which have plunged to near 13-year lows this month.
OPEC’s richer members led by the Gulf countries have refused to budge, preferring to fight for market share against rivals like the US.
Analysts said traders will also be monitoring orders data on US durable goods for January on Thursday, the latest gauge of the economic health of the United States, the world’s top oil consumer.
The US energy department will also release Wednesday its inventory on commercial crude stockpiles for the week ending February 19, a closely watched data to measure demand in the world’s biggest economy.