Oil prices tumble as Saudi rules out production cuts

He also said that a proposed freeze in output at January levels would require “all the major producers to agree not to add additional barrels”.

“It’s not going to happen”.

But a production cut is out of the question simply because countries “will not do it”, he said, “even if they say that they will”.

Near 8:30 p.m. EST, the price of West Intermediate crude oil – the USA benchmark – was trading near $31.40 while Brent crude, the worldwide measure, was trading at around $33.

“Overall, this week’s data point will do very little to offset the Saudi oil minister throwing cold water on production cuts any time soon”, he said. And although the announced plan is the first concrete attempt at limiting output that Saudi Arabia has publicly supported, a lot of hard negotiations lie ahead if it is to prove successful. Of course, that same report revealed another surge in oil inventories to a new record high.

Oil prices fell further Wednesday on the receding likelihood of an output cut, let alone a freeze at current levels, to tackle a global supply glut. They say they want a reasonable price but to reach that there has to be sacrifice. It is a simple case of letting the market work.

“It sounds harsh, and unfortunately it is, but it is a more efficient way to rebalance markets”.

More meetings on the potential freezes will be held in March, al-Naimi told the IHS CERAweek conference in Houston.

Oil prices dropped on Wednesday, following speculation that some oil producers won’t commit to freezing their production level.

“Given recent developments with Russian Federation and other Opec members, some appear to have placed hope in [the Saudis]; once again their hopes have been dashed”.

“Some of our neighbors have increased their production to 10 million barrels a day… and now they have the nerve to say we should all freeze our production together”, Bijan Zanganeh was quoted by the Iranian news agency ISNA.

Zangeneh had for long vowed that Iran will increase its oil production by 500,000 bpd as soon as the sanctions – that kept a ceiling of about 1 million bpd on the country’s oil production – would be lifted.