Oil prices dipped in Asia today as traders took profits from a recent rally, driven by hopes major producers could agree to limit their output at a meeting next month.
Prices had jumped yesterday after Venezuelan oil minister Eulogio Del Pino said his country was preparing to meet with other producers in March to discuss ways to stabilise the market.
Sentiment was also helped by data showing US durable goods orders increased 4.9 per cent in January, indicating an improved economic outlook for the world’s largest crude oil consumer.
At around 0330 GMT, the US benchmark West Texas Intermediate (WTI) for delivery in April was down one cent at $33.06 a barrel on the New York Mercantile Exchange.
In London, Brent North Sea crude for April delivery, the European benchmark, slid 16 cents to $35.13 a barrel, down 0.45 per cent.
“The rally yesterday was not really due to fundamentals, but due to speculation that there would be some kind of agreement between the major oil producers to freeze production,” IG market strategist Bernard Aw told AFP in Singapore.
“But it’s not a solid piece of news to push oil prices higher, which is why we see some profit-taking in the market today.”
Oil prices have slumped to below $30 a barrel, hit by concerns a global supply glut will be prolonged as the Organization of Petroleum Exporting Countries keeps pumping at a pace that is outstripping demand.
Aw said Venezuela has been working hard to seal an agreement with other producers to trim their output, as the South American country’s economy has been hurt by the slide in prices.
Still, he added: “I actually expect them not to come to any agreement, so this will largely disappoint the market and we will see a return below $30 for crude oil.”
OPEC heavyweights Russia and Saudi Arabia, as well as Venezuela and Qatar, had announced last week a preliminary deal to freeze output at January levels, but only if other major producers followed suit.
Key producer Iran, which is ramping up production after nuclear-linked Western economic sanctions were lifted, and others have however reacted coldly to the freeze proposal.