Oil prices retreated in Asia trade after rebounding overnight on news that OPEC is planning informal talks next month – a sign it could intervene to strengthen prices.
The Organisation of the Petroleum Exporting Countries said in a statement that a meeting would take place on the sidelines of the International Energy Forum in Algeria from September 26 to 28, ahead of a planned meeting due at the end of November.
Analysts said markets were reacting to rumours that global producers were mulling a deal to freeze oil output levels.
“News that OPEC would be having a September meeting with certain members keen to push for supply cuts again served as the impetus for oil prices to rally,” said Angus Nicholson, a strategist at IG Markets Ltd. in Melbourne.
“While a deal is highly unlikely to eventuate, the fact that it is even being mentioned shows how much difficulty the past month’s renewed selloff was causing many struggling OPEC members.”
But in Asian trade, prices fell back as investors weighed whether the meeting would bring about any tightening of supply, according to Bloomberg.
At around 0430 GMT, West Texas Intermediate was down 36 cents to $42.66 while Brent lost 41 cents to $44.98.
Prices have been fluctuating since entering a “bear” market last week, falling more than 20 per cent and closing below $40 a barrel for the first time since April.
Vienna-based OPEC last month said it expected the global supply glut to ease further this year and next thanks to reductions in oil output from producers outside the cartel, particularly the United States.
If accurate, this would be a vindication of its strategy since 2014 of squeezing non-OPEC suppliers by keeping production at high levels despite low prices.