Oil falls on growing doubts producers will freeze output | Reuters - Firstpost
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Oil falls on growing doubts producers will freeze output | Reuters

  Updated: Apr 4, 2016 23:45 IST

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NEW YORK Oil prices fell on Monday, with Brent touching one-month lows as investors doubted that producers will freeze output to rein in a worldwide glut.

U.S. crude prices briefly bounced off session lows after an outage on a major pipeline raised concerns about delivery to the U.S. storage hub.

Iran will raise its crude output and exports until it reaches pre-sanction levels, the semi-official Mehr news agency quoted Oil Minister Bijan Zanganeh as saying. Last week, a Saudi prince reportedly dismissed a production freeze plan without Tehran's involvement.

In the United States, the Keystone crude pipeline has been shut after an incident on Saturday in South Dakota, the pipeline's operator TransCanada Corp said in a notice sent to shippers and obtained by Reuters. The pipeline is part of a network that carries oil to the U.S. crude delivery hub in Cushing, Oklahoma.

Brent crude futures were down 60 cents at $38.07 a barrel by 12:55 p.m. EDT (1655 GMT). The session low was $37.96, the lowest since March 4.

U.S. crude futures slid 50 cents to $36.29. The session low was $36.11.

Oil prices have lost upward momentum in the past week, but remain up about 40 percent from around 12-year lows struck in mid-February. U.S. government data on Friday showed that in the week to March 29, hedge funds cut their net long position in U.S. crude for the first time in six weeks.

The Organization of the Petroleum Exporting Countries and other major oil producers are to meet in Doha, Qatar in two weeks to discuss an output freeze plan.

But analysts said prospects for a deal looked dimmer, with the Saudis declining to rein in output without Iran, and Russia reporting its highest oil production in 30 years.

"If we draw a line and add up the stance of these countries, we have to conclude that a meaningful deal is only a distant possibility," PVM Oil Associates analyst Tamas Varga said.

(Additional reporting by Amanda Cooper in LONDON; Editing by Dale Hudson, David Goodman and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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