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Oil trades near US$39 amid doubts producer talks will curb glut
[NEW YORK] Oil traded near US$39 a barrel in New York amid speculation that a meeting of crude-producing countries next month won't ease a global supply glut.
Futures fell as much as 1.5 per cent after earlier rising 1.7 per cent.
Iran and Libya are the two Opec members that haven't pledged to attend production-freeze talks on April 17 in Doha, Qatar.
The absence of countries aiming to restore supplies that were shuttered by conflict and sanctions means any accord is unlikely to be effective, Commerzbank AG said last week.
"There's a growing realization that the meeting in Doha is not going to be effective," said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida.
"The US has lost about 500,000 barrels a day from its peak, but the Iranians are planning to increase output by more than 1 million, so we're going to see the surplus grow."
Oil has climbed back from a 12-year low last month on speculation that the global surplus will ease as US output declines and major producers including Saudi Arabia and Russia discuss capping output.
US data last week showed inventories rose by more than three times what was forecast, while imports increased to the highest since June 2013.
West Texas Intermediate oil for May delivery fell 25 US cents, or 0.6 per cent, to US$39.21 a barrel at 12.50 pm on the New York Mercantile Exchange.
Total volume traded was 52 per cent below the 100-day average.
Brent for May settlement slipped 38 US cents, or 0.9 per cent, to US$40.06 a barrel on the London-based ICE Futures Europe exchange.
Prices slipped 1.8 per cent last week. The global benchmark crude traded at an 85-US cent premium to WTI.
Trading in New York and London was closed Friday for the Good Friday holiday.
The number of bets on rising oil has barely increased as crude jumped more than 50 per cent since Feb 11.
Meanwhile, the liquidation of short positions during the past seven weeks covered by data from the US Commodity Futures Trading Commission was the largest in records going back a decade.
That suggests the upward pressure on prices has come from traders cashing out of bearish wagers.
Rigs targeting oil in the US fell by 15 to 372, the lowest since 2009, Baker Hughes Inc said on its website Thursday.
More than 150 have been parked since the start of the year.
"There was speculation that the return of $40 oil would lead to a return of rigs," said Bob Yawger, director of the futures division at Mizuho Securities USA in New York."The data shows this isn't the case."
US crude inventories probably rose by 3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
Iran, committed to boosting output after sanctions were lifted in January, needs US$40 billion for oil projects in the year ending next March, according to Oil Minister Bijan Namdar Zanganeh.
Oman, a non-Opec oil exporting country, will attend the Doha meeting, CNBC Arabia reported.