During Asia trade on Wednesday, crude oil prices froze under $29, but pared almost all Tuesday’s gains, because market participants were still skeptical that a recently discussed deal to freeze output by key oil producing countries would come true.
On Tuesday, oil ministers of such countries as Russia, Qatar, Venezuela and Saudi Arabia met in Doha with the only purpose to freeze oil output at the January level on the condition other oil producers support and join. However, many market watchers point out that Iran will most likely ignore this initiative. Furthermore, even if the given deal came true, it wouldn’t be able to drastically diminish current oversupply, especially considering last month’s output.
Saudi Arabia and Russia are the two largest oil producing countries around the globe. In January, Russian oil production hit a record of 10.88 million barrels a day, meanwhile Saudi Arabia managed to produce up to 10.23 million barrels in that month. Both countries currently boast 21% of global oil production.
Finally, oil futures for March delivery on the New York Mercantile Exchange were traded at $29.94, thus demonstrating a $0.10 dip. April Brent crude on ICE Futures exchange in London dropped to $32.14 or -$0.04.