The rapid surge in oil prices last week slowed down on Tuesday, after a meeting between oil ministers from Saudi Arabia, Russia, Qatar and Venezuela ended with an agreement to maintain output at their January levels, dashing hopes for any cutback in oil production.
The deal, however, is contingent on other oil-producing countries following suit, but analysts are skeptical. They believe Iran and Iraq will continue to ramp up production, as previously announced.
Sources told Reuters that Iran would only consider cutting back output once its production levels reach pre-sanction levels of more than 500,000 barrels per day.
Qatar’s energy minister Mohammad bin Saleh al-Sada said the agreement will help stabilize the volatile oil market that is currently oversaturated with unwanted oil.
Forward prices for Crude oil on the New York Mercantile Exchange inched up $0.32, or 1.09%, to trade at $29.76 by 5:10AM eastern time.
Global oil prices rallied last week, rising by more than 12% on Friday on reports of a potential meeting between major producers to scale down production to address the current oversupply of the market.
In London, Brent oil prices for April delivery increased $0.51, or 1.51%, to trade at $33.90 per barrel after surging by more than 6% in early trading.
Forward prices for oil have gone down by approximately 70% since June 2014 as global crude production continued outpace demand in the market.