Oil prices down in Asia ahead of OPEC policy meeting

West Texas Intermediate, the USA benchmark price for crude oil, was down 2.1 percent from Tuesday to start the day at $41.85.

The glut of supply and falling demand from slowing economies such as China has caused the price of “black gold” to slump nearly 63 per cent from a peak of $115 a barrel last summer. USA stockpiles on the other hand stand at more than 488 million barrels – the highest since year 1930.

“We have no responsibility for the situation that is in the market”, Zanganeh said. USA crude inventories probably declined for the first time in 10 weeks, a Bloomberg survey showed before Energy Information Administration data Wednesday.

Analysts meanwhile expect OPEC – whose 12 member nations from the Middle East, Africa and Latin America pump out about one third of the world’s oil – to leave its daily oil output ceiling at 30 million barrels at Friday’s meeting.

Saudi Arabia is likely to reject the calls from fellow members of OPEC to cut oil production when the group meets later this week.

Saudi Arabia will propose a deal to balance oil markets, including challenging demands on OPEC members Iran and Iraq.

The Saudi refusal to cut output came as somewhat of a surprise at last year’s meeting, which helped drive oil prices down under $80 a barrel to about $40 now.

The cartel’s output is accounted for around 40 percent of the global crude output.

“However, depending on pace, size and build-up of idle capacity, and Iranian comeback may also force the Saudis to compromise on output targets in the medium term”, he said.

Iran is also expected to announce at the meeting its plans to increase its oil exports when crippling western sanctions are lifted under a landmark deal with major powers to curb Tehran’s nuclear programme.

The oil-sensitive Canadian dollar closed at 74.90 cents US.

The inventory report was “pretty bearish across the board” and paved the way for prices to retest the $US40-a-barrel mark, according to Tariq Zahir, who is a managing member of Tyche Capital Advisors.

But it will be challenging to get all parties to agree, given diverging views on which producers should cut or limit production.