Oil prices tumble as Saudi Arabia rules out production cuts

By 06:40am, U.S. benchmark West Texas Intermediate (WTI) for delivery in April was down 67 cents, or 2.10 per cent, at US$31.20 (RM132.03)and Brent crude for April fell 44 cents, or 1.32 per cent, to US$32.83 a barrel.

“It may sound harsh, and unfortunately it is, but it is the most efficient way to rebalance markets”, Al-Naimi told the IHS CERAWeek conference, an annual gathering of the North American oil industry.

Canadian oil production has continued to grow throughout the oil price slump, largely because oilsands operations are expensive to shut down once they’re started, and new oilsands projects, started years ago, have continued to come online.

Mr al Naimi said: “The producers of these high-cost barrels must find a way to lower their costs, borrow cash or liquidate”.

Iran’s oil minister Bijan Zanganeh says there is room for discussion in the matter of oil production, but that the country will not be relinquishing market share.

Saudi Arabia’s oil minister had a message for high-cost producers on February 23: Saudi is quite content to ride out low prices and those who aren’t should “get out” of the market.

“Al-Naimi’s remarks punctured an oil-price rally that has lacked substance”, said David Hufton of broker PVM.

Iran’s argument is that there is no way they can freeze one million barrels while others are freezing 10 million barrels.

US crude was down more than 3 percent, also pressured by data showing an increase in stockpiles.

Refinery crude runs fell 163,000 barrels per day as utilization rates dropped fell 1 percentage point to 87.3 percent of total capacity, EIA data showed.

Recently, Saudi Arabia, Russia, Qatar and Venezuela agreed to freeze their production at January levels.

Tehran has repeatedly said it wouldn’t consider a supply reduction until its production has climbed back to its pre-sanction level, which was around 4 million barrels a day.

Last week, Iran said that they will not be taking part in the freeze. ASSOCIATED PRESSOil extended declines after Iran said a proposal by Saudi Arabia and Russian Federation for producers to freeze output was “ridiculous” as the Persian Gulf nation seeks to boost exports after years of sanctions.