Oil prices bounce back in Asia after sharp losses
SINGAPORE, Singapore—Oil prices rebounded in Asia Wednesday after a two-day sell-off fanned by concerns over planned talks between major producers to freeze output.
Both main contracts tumbled around five percent on Monday and Tuesday, after Iran said at the weekend it would not join the talks until its production had hit 4.0 million barrels per day.
But investors bought back into the black gold Wednesday.
At around 0600 GMT, US benchmark West Texas Intermediate for delivery in April was up 1.62 percent, or 59 cents, to $36.93. Brent for May was up 1.21 percent, or 47 cents, at $39.21.
One of the world’s biggest producers, Iran, returned to the export market in January after years of Western sanctions linked to its nuclear program.
The meeting proposed by the world’s top two producers, Russia and Saudi Arabia, has been pushed back to April from March 20, raising doubts it would ever take place or that an agreement will be reached.
Article continues after this advertisementIran increased output by 187,800 barrels a day to 3.13 million in February, the biggest monthly gain since 1997, OPEC said in a monthly report.
Article continues after this advertisementPhillip Futures analyst Daniel Ang told AFP: “We’re looking at a close to 200,000 barrels per day increase which is basically more oil for an oversupplied market.”
Markets are awaiting a weekly official report on US crude inventories and production data later Wednesday, as well as the conclusion of the Federal Reserve’s latest policy meeting to see if it provides guidance on its plans for interest rates.
A rate increase would typically bolster the dollar, which would make dollar-priced oil more expensive, hurting demand and prices.
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