Crude oil prices dropped in Asia on Monday as the supply outlook remained bearish and chances for near-term trims in output fading. On the New York Mercantile Exchange, crude oil for delivery in May dropped 0.90% to $15.060 a barrel. Last week, oil futures fell sharply on Friday, after the Saudi deputy crown prince said the kingdom will not cap output unless Iran and other major producers do so, casting doubts over whether a highly awaited production freeze will happen.
Saudi Deputy Crown Prince Mohammed bin Salman insisted that the kingdom will resist any agreement to cap its output unless the pact is also signed by their Iranian rivals. Iran is expected to attend an oil producers meeting in Qatar on April 17 to discuss an output freeze, although it may not necessarily partake in negotiations. The Islamic Republic has maintained that it will not contribute to any output freeze until its crude exports return to pre-sanction levels.
On the ICE Futures Exchange in London, Brent oil for June delivery sank $1.66, or 4.12%, to close the week at $38.67 a barrel, after slumping to a daily low of $38.55, a level not seen since March 15.Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet in Doha, Qatar later this month to discuss an output freeze. But it isn’t clear exactly which, or how many, OPEC and non-OPEC members will attend the meeting.
According to the U.S. Energy Information Administration, crude oil inventories rose by 2.3 million barrels last week to a record-high of 534.8 million barrels. Since falling to 13-year lows at $26.05 on February 11, U.S. crude futures have rebounded by approximately 40% as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.