Investing.com - Crude oil prices rebounded mildly in Asia on Wednesday after an overnight drop based on lukewarm sentiment for a potential output freeze.
On the New York Mercantile Exchange, WTI crude for March delivery rose 0.24% to $29.20 a barrel.
The American Petroleum Institute is expected to provide estimates of crude oil and refined product stocks last week, followed on Thursday by more closely-watched figures from the U.S. Department of Energy. The data was delayed by a day because of a federal holiday on Monday in the U.S.
In the U.S., crude stockpiles at the Cushing Oil Hub in Oklahoma, rose by 705,000 for the week ending on Feb. 12, according to global data provider Genscape, Inc. Inventories at Cushing, the main delivery point of Nymex oil, are approaching near 90% of full storage capacity.
Overnight, U.S. crude pared sharp gains on Tuesday, after investors expressed intense skepticism that a Saudi Arabian-Russian brokered deal aimed at freezing production at its current levels could be completed without the cooperation of Iran.
On the Intercontinental Exchange, Brent crude for April delivery traded in a broad range between $31.93 and $35.54 a barrel, before closing at $32.76, down 1.25 or 3.73% on the session. At one point on Tuesday, North Sea brent futures sprung to near three-week highs reached at the start of the month, following a four-day winning streak to cap January. Brent still settled at its lowest closing level in four sessions, following a late sell-off.
Both the international and U.S. benchmarks of crude are down more than 70% over the last 15 months since OPEC rattled global energy markets in November, 2014, with a strategic decision to leave its production ceiling above 30 million barrels per day. As a result oil markets have been awash in excessive supply, pushing crude prices to levels not seen since the early-2000s.
In Doha, the four producers agreed in principle on an accord to freeze output at its January levels, representing the first time OPEC and Non-OPEC states have reached a deal in 15 years. Last month, Saudi Arabia, the world's top exporter pumped 10.2 million barrels of crude per day, just below its June peak of 10.5 million bpd.
"The reason we agreed to a potential freeze of production is simple: it is the beginning of a process which we will assess in the next few months and decide if we need other steps to stabilize and improve the market," Saudi Arabia energy minister Ali al-Naimi told reporters on Tuesday.
"We don't want significant gyrations in prices, we don't want reduction in supply, we want to meet demand, we want a stable oil price," al-Naimi added. "We have to take a step at a time."
Any deal, however, is contingent on the approval of Persian Gulf neighbor Iran, which was notably absent from the meeting. On Monday, Iran began exporting crude oil to Europe for the first time in five years, nearly a month after a group of Western Powers eased long-term economic sanctions against the nation, paving the way for its return to global markets. Three Iranian tankers carrying 2 million barrels to French Oil and Gas company Total, and another 2 million to companies in Spain and Russia were headed for Europe, Iran deputy oil minister Rokneddin Javadi told the Shana News Agency. Iran also announced plans over the weekend to boost its production and exports by 1 million barrels per day in 2016.
While the four producers are scheduled to meet with Iran and Iraq on Wednesday in Tehran, Iranian officials are not expected to freeze production until it returns to pre-sanction levels.