Investing.com - Oil prices fell sharply in North American trade on Thursday, hitting the lowest levels of the session amid reports that a meeting between OPEC and non-OPEC oil producers set for later this month to discuss an output freeze was unlikely to happen, as Iran had yet to commit to the proposal.
On the ICE Futures Exchange in London, Brent oil for May delivery tumbled $1.08, or 2.56%, to trade at $40.01 a barrel by 14:45GMT, or 9:45AM ET.
Brent soared to a three-month peak of $41.47 earlier this week amid continued hopes major oil producers will meet later this month to discuss a potential output freeze.
Brent futures are up by roughly 30%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
Elsewhere, crude oil for April delivery on the New York Mercantile Exchange shed 77 cents, or 2.01% to trade at $37.52 a barrel. A day earlier, New York-traded oil futures rallied to $38.51, the most since December 9, before closing at $38.29, up $1.79, or 4.9%.
Wednesday’s gains came after weekly supply data showed demand for gasoline and distillates was far higher than expectations, despite oil stockpiles climbing to a fresh all-time high above 520 million barrels.
Since falling to 13-year lows at $26.05 on February 11, Nymex oil prices have rebounded by approximately 35% as a decline in U.S. shale production boosted sentiment.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share, driving down prices by more than 70% over the past 20 months.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $2.71 a barrel, compared to a gap of $2.78 by close of trade on Wednesday.