Russia open to meeting with major oil-producing countries

“Prices could stay in the twenties until we see some reaction on the supply side”, said Thomas Saal, analyst at INTL FC Stone in Miami, Florida.

“The U.S. crude inventory is already at the highest levels since (the) 1930s”, ANZ analysts said in a note on Wednesday.

Igor Sechin, the head of Rosneft, Russia’s state-owned oil company and its biggest producer, met with Venezuelan Oil Minister Eulogio Del Pino in Moscow and said afterward that the two men had discussed possible joint efforts to stabilize global oil markets.

Last week’s relief rally in crude oil, spurred in part by speculation that Russian Federation and the Organization for Petroleum Exporting Countries (OPEC) might reach a deal to curb production, feels like a distant memory.

Brent for April delivery was down 92 cents at $32.32 a barrel after touching a low of $32.23, down 5.9 percent, in the session. A global surplus that fueled oil’s decline to a 12-year low will shift to deficit as USA shale output falls, according to Goldman Sachs Group Inc.

USA crude, also known as West Texas Intermediate (WTI), fell 15 cents to $29.73, having ended the previous session down $1.74, or 5.5 per cent.

Weekly inventory data from the U.S. Department of Energy’s Energy Information Agency is due later on Wednesday.

Coal’s share of China’s overall energy mix fell past year, and the smog-bitten country appears to be following the United States and Europe’s lead in turning away from the commodity.

US crude oil prices dropped by seven percent at the week’s start.

Oil production in Russian Federation hit a post-Soviet high in January, reaching an average of 10.88 million barrels per day (bpd), preliminary data released by the Energy Ministry showed on Tuesday.

Prices are in danger of returning to the $20s unless there was concrete reaction on the supply side, said Thomas Saal, analyst at INTL FC Stone in Miami, Florida. Investors are waiting on economic data from the Eurozone, including unemployment figures and producer prices, later on Tuesday to give oil markets further direction.

“I think it’s in the cards to re-test the lows from mid-January”, he said, referring to Brent’s low of US$27.10 and WTI’s US$26.19.

Still, Citi called a bottom on prices on Tuesday, saying that even while a deal may not materialize, the current lows will be short lived.

The talk of cooperation has not bolstered oil prices or global stocks this week like it did last week, however.

The tumbling crude price has hit oil majors, with BP slumping to its worst annual loss in more than 20 years last year, its results showed.