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Oil prices bounce back in Asia after sharp losses

Singapore : Oil prices rebounded in Asia today after a two-day sell-off fanned by concerns over planned talks between major producers to freeze output.

Both main contracts tumbled around five per cent on Monday and yesterday after Iran said at the weekend it would not join the talks until its production had hit 4.0 million barrels per day.

But investors bought back into the black gold today, sending US benchmark West Texas Intermediate for delivery in April up 1.51 per cent, or 55 cents, to USD 36.89. Brent for May was up 1.06 per cent, or 41 cents, at USD 39.15.

One of the world’s biggest producers, Iran returned to the export market in January after years of Western sanctions linked to its nuclear programme.

The meeting proposed by the world’s top two producers Russia and Saudi Arabia has been pushed back to April from March 20, raising doubts it would ever take place or that an agreement will be reached.

Iran increased output by 187,800 barrels a day to 3.13 million in February, the biggest monthly gain since 1997, OPEC said in a monthly report.

Phillip Futures analyst Daniel Ang told AFP: “We’re looking at a close to 200,000 barrels per day increase which is basically more oil for an oversupplied market.”

Markets are awaiting a weekly official report on US crude inventories and production data later today as well as the conclusion of the Federal Reserve’s latest policy meeting to see if it provides guidance on its plans for interest rates.

A rate increase would typically bolster the dollar, which would make dollar-priced oil more expensive, hurting demand and prices.

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