On Monday, oil prices weakened as Middle East producers’ aim to curb overproduction, while the U.S. output remained higher. Increasing concerns over Asia’s economic outlook declined on prices as well.
Furthermore, Iran returns on global oil markets after sanctions against it were raised in January. Meanwhile, Iran told the media that oil production, including its exports, will remain high until it hit the market position before the sanctions were imposed.
Major producers wished for the deal in order to limit ballooning output. Earlier last week, Saudi Arabia, a top exporter, mentioned to participate only if Iran, its rival, will took part too.
U.S. crude futures declined by about 1.06 percent, hitting $36.39 per barrel, while Brent crude lost 0.9 percent and settled at $38.33. Oil prices were dragged by 70 percent since 2014 led by a global glut.
Barclays said, "Macroeconomic concerns and high petroleum inventories are the oil market's ball and chain and are likely to keep the oil price between the mid-$30s and low $40s in Q2."
Subsequently, a few analysts are expecting the weakening greenback to stimulate oil demands mainly from importers that holds other currencies.
According to Morgan Stanley, "negative oil headlines, producer hedging at higher prices and bloated inventories" point out any upside in prices will be narrowed.
In addition, the U.S. production weighed on the global glut as it continues to increase in spite of sharp cuts in drilling for new reserves, including raising in bankruptcies.
Goldman Sachs mentioned, "The U.S. oil rig count dropped further this week, with a total 10 rigs idled,"
"The current rig count implies U.S. production ... would decrease by 705,000 barrels per day yoy on average in 2016, and by 375,000 barrels per day yoy in 2017," it added.Publication source