In early Asia trade on Wednesday, crude oil prices crude prices lost ground right after Saudi Arabia officially dismissed the possibility of its production cut, thus giving more time for the market to balance again.
In New York sweet, light crude oil for April delivery traded at dipped 2.1% to $31.20. Then, in London, April Brent crude futures slumped 1.2% at $32.88 a barrel.
On Tuesday, Ali al-Naimi, Saudi Arabia oil minister told that it makes no sense to waste his country’s time looking for production cuts, dropping a hint that a production freeze would probably make inventories drop.
Last week, crude oil prices surged after Saudi Arabia as well as other oil producers, including Venezuela, Qatar and Russia came to compromise to cap their future production at the January level in order to support prices. However, hopes that the world oversupply would fade away rapidly dimmed and prices went down when Iran suddenly rebuffed the newly arranged pact.
Tehran has repeatedly informed that it’s not going to consider a supply cut until the country’s production has got back to its pre-sanction level. By the way, that level was approximately 4 million barrels a day.