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Oil prices resume slide in Asia
[SINGAPORE] Oil prices resumed their slide in Asia Wednesday as long-running concerns over the saturated market overshadowed talk of possible coordination between some major producers to slash output.
Trader are also keeping an eye on the release later in the day of a report on US stockpiles, hoping for an idea about demand in the world's biggest economy and key oil user.
At around 0300 GMT, US benchmark West Texas Intermediate for March delivery was down 59 cents, or 1.88 per cent, at $30.86 and Brent crude for March fell 43 cents, or 1.35 percent, to $31.37 a barrel.
They had risen around four per cent Tuesday on hopes for output talks.
Iraqi Oil Minister Adel Abdulmahdi said Tuesday at a conference in Kuwait that Baghdad was "ready to cooperate" on cutting production, but only if non-Opec producers did so as well.
Abdulmahdi was also quoted by Bloomberg as describing increased "flexibility" on output between Russia and the Organization of the Petroleum Exporting Countries (Opec), fuelling hopes for talks on an agreement.
State-owned Russian news agency Tass reported Russian oil company Lukoil has asked the Kremlin to work with Opec to limit output.
On Monday, Abdullah el-Badri , general secretary of Opec called for the grouping and other producers to work together to lift prices. Opec in December rejected calls for a production cut, preferring to fight for market share with rival producers, particularly the United States.
Prices of the battered commodity soared late last week from 12-year lows on hopes for fresh stimulus by the European and Japanese central banks.
However, the ongoing worries about a supply glut, weak demand and slowing global economy returned to the fore.
"Prices are moving in somewhat of a range-round movement... You can't really adjust supply to support prices at this point of time," Phillip Futures analyst Daniel Ang said.
He said the key for a sustained price rebound is for demand to pickup and for major crude producers to slash output.
Ang said he was sceptical production would be slashed soon.
"We've seen over the past one-and-a-half years... there was a lot of talk about working together to keep prices strong but none of these has come to fruition," he said.
A strengthening US currency has also been helping dampen demand for dollar-priced oil, which becomes more expensive for holders of weaker units.
The market is waiting for the results later Wednesday of a meeting of US central bank policymakers on the timing of another hike in US interest rates, having lifted them in December for the first time in almost a decade.