Investing.com - Oil prices extended losses from the prior session in European trade on Tuesday, falling to fresh four-week lows amid growing doubts over the likelihood of a production freeze happening later this month.
On the ICE Futures Exchange in London, Brent oil for June delivery hit an intraday low of $37.36 a barrel, a level not seen since March 4, before recovering to $37.59 by 06:52GMT, or 2:52AM ET, down 10 cents, or 0.27%.
A day earlier, London-traded Brent futures slumped 98 cents, or 2.53%, as investors doubted that oil producing countries would freeze output to address a global glut.
Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet in Doha, Qatar on April 17 to discuss an output freeze. But it isn’t clear exactly which, or how many, OPEC and non-OPEC members will attend the meeting.
Saudi Deputy Crown Prince Mohammed bin Salman said last week that the kingdom will not cap output unless Iran and other major producers do so.
Iran has maintained that it will not contribute to any output freeze until its crude exports return to pre-sanction levels, casting doubts over whether a highly awaited production freeze will actually happen.
Brent futures are down almost 12% from their March highs of $42.50 a barrel. Despite recent losses, prices are still up by roughly 40% 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 May delivery on the New York Mercantile Exchange dropped 20 cents, or 0.55%, to trade at $35.50 a barrel after slumping to a daily low of $35.27, the weakest level since March 4. On Monday, Nymex oil plunged $1.09, or 2.96%.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 3.3 million barrels in the week ended April 1.
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.
Meanwhile, Brent's premium to the WTI crude contract stood at $2.09 a barrel, compared to a gap of $1.99 by close of trade on Monday.