SINGAPORE Crude oil prices dipped in early trading on Friday as reports of a meeting by oil producers to freeze output failed to convince traders that enough effort was being made to rein in ballooning global oversupply.
The dip in prices came after oil markets rose late on Thursday on the back of strong U.S. gasoline demand and what ANZ bank called a "perennial hope that OPEC members can coordinate supply."
This hope was based on reports that OPEC-members Saudi Arabia, Qatar and Venezuela as well as non-OPEC producing giant Russia would meet in March to discuss capping crude oil production at January levels.
But the rally did not last into Friday as traders estimated that a freeze in production would not reduce a glut that has pulled down prices by 70 percent since 2014.
U.S. West Texas Intermediate (WTI) crude futures were trading at $32.96 per barrel at 0047 GMT, down 11 cents from their last settlement.
"Capping production at January levels, when the market was pumping out well over a million barrels of crude a day above what consumers need, will in no way reduce overcapacity. In fact, given that Iran has started to return to markets since January, it'll worsen the glut," said one senior oil trader.
Iran is hoping to increase its crude exports by 1 million barrels per day within the next year after international sanctions against it were lifted in January. The sanctions had cut Iran's exports by more than half from a pre-sanctions peak of almost 3 million barrels per day in 2011.
(Reporting by Henning Gloystein; Editing by Michael Perry)
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Updated Date: Feb 26, 2016 07:15:12 IST