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Oil prices drop after Saudi oil minister downplays production freeze

Published 04/13/2016, 03:57 AM
© Reuters.  Oil prices drop after Saudi oil minister downplays prospects for output freeze
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Investing.com - Oil prices fell on Wednesday after Saudi Arabia's oil minister appeared to rule out an oil production freeze ahead of Sunday’s meeting of major producers in Doha.

Crude oil for May delivery on the New York Mercantile Exchange was down 62 cents, or 1.47%, to trade at $41.58 a barrel by 0.7.42 GMT.

Global benchmark Brent fell 46 cents to $44.23.

The drop in oil prices came after Saudi’s oil minister Ali al-Naimi played down the prospect of an output freeze at Sunday’s meeting.

The meeting will include both members and nonmembers of the Organization of the Petroleum Exporting Countries.

According to a Reuters report citing comments by the minister published Wednesday in a Saudi newspaper al-Naimi said to “forget about this topic,” when asked about cuts to his country’s production.

The remark came a day after reports that Russia and Saudi Arabia had reached consensus on an oil output cap ahead of Sunday’s meeting.

Analysts have cautioned that the outcome of the meeting may have a limited effect on curbing overproduction and rebalancing the oil market.

Oil prices had already come under pressure earlier in the day following a larger than expected increase in U.S. crude stockpiles.

U.S. crude stocks rose by 6.2 million barrels to 536.3 million last week, data from industry group the American Petroleum Institute showed late Tuesday.

Analysts had expected a more modest 1.9 million barrel increase.

The Energy Information Administration was due to publish official inventory data later on Wednesday.

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