Oil prices dipped in Asia Tuesday after mounting a strong rally the day before as traders remain doubtful that talks on an output freeze among key crude producers will lead to an agreement.
US crude rose back above $30 a barrel and European benchmark Brent climbed well over $34 on Monday on hopes that the discussions would lead to concrete action to stabilise the battered market.
But at around 0300 GMT on Tuesday, US benchmark West Texas Intermediate (WTI) for delivery in April, a new contract, was down 41 cents, or 1.23 per cent, at $32.98. Brent for April dropped 43 cents, or 1.24 per cent, to $34.26 a barrel.
“Yesterday’s increase could have come mainly from OPEC trying to rally the market into thinking that there will be action to come between OPEC and non-OPEC producers,” Phillip Futures analyst Daniel Ang said, referring to the discussions on a possible production freeze.
“But without any concrete action, I continue to believe that prices shouldn’t be going upwards and this is reflected in the price drops.”
Muhammadu Buhari, the president of Nigeria, Africa’s biggest oil producer, began a week-long visit to the Gulf on Monday stumping for relief from falling prices.
His trip started in Saudi Arabia, where he was to meet with King Salman bin Abdulaziz and senior Saudi officials. Saudi Arabia is the biggest producer in the 13-nation Organization of the Petroleum Exporting Countries.
Poorer OPEC members like Nigeria and Ecuador have been clamouring for a cut in production in a bid to stabilise prices, which have plunged to near 13-year lows this month.
OPEC’s richer members led by the Gulf countries have refused to budge, preferring to fight for market share against rivals like the US.
