Oil prices fell Thursday on a report that major producers are unlikely to meet to discuss an output freeze. The game is everyone against everyone. How to balance the interest between different parties and force the agreements to be acted are still in controversy. Even though ECB announced it is going to cut the interest rate to simulate the inflation rate, oil price doesn't get positive respond to this change. It’s still build itself on the demand and supply.
Prices have climbed in recent weeks on expectations that large producing nations, including members of the Organization of the Petroleum Exporting Countries, would agree to freeze their output at January levels. Saudi Arabia, Russia, Qatar and Venezuela previously said they were willing to freeze, and other producers in Latin America, Africa and the Persian Gulf appeared likely to join a meeting as well.
Iran is expected to increase its production this year now that international sanctions are lifted, and market watchers say higher Iranian output could offset declining production from the U.S. and other countries.
Kuwait's energy minister said Tuesday that the country wouldn't agree to freeze its output unless Iran also agreed to do so.
Oil prices have surged in recent weeks on expectations of an output deal among major producers and some supply outages in Nigeria and Iraq. However, analysts warn that prices could slump again as the global market remains oversupplied.
"The rally is built on the tenuous assumption that production will continue to decline, demand will rise to reduce inventories, and numerous sovereign nations will cooperate to support prices," said A.J. McNally, chief executive of ClearHedging, in a note. "But the underlying fundamentals are not yet in balance and it is probable that we will see lower prices at some point in 2016."
U.S. crude stockpiles rose last week to their highest level in more than 80 years, the Energy Information Administration said Wednesday.