NEW YORK CITY – Oil prices fell on Mar. 10, with US crude retreating from three-month highs as refinery maintenance threatened to raise record inventories of crude and sources said an OPEC production freeze meeting was unlikely without Iran’s participation.
As reported by Reuters, an initial rally in the dollar after the European Central Bank (ECB) cut its key lending rate to zero also pressured oil, although crude prices recovered from their lows as the euro rebounded on ECB comments that more cuts were unlikely.
Brent crude futures were down $1.32 at $39.75/bbl by 11:30 a.m. ET (1630 GMT), having earlier this week peaked at $41.48, the highest level since Dec. 9.
US crude fell $1.07 to $37.22/bbl, having hit $38.51 on Mar. 8, also its highest since Dec. 9.
Prices rose as much as 5% on Mar. 9, after a big gasoline inventory drawdown in the United States overshadowed record-high crude stockpiles. But analysts warned that a global crude production overhang of more than 1 MMb/d showed few signs of abating.
The focus lies on a potential agreement to rein in output between producers from OPEC led by Saudi Arabia, and non-OPEC exporters including Russia.
A meeting between oil producers to discuss a global pact on freezing production is unlikely to take place in Russia on Mar. 20, sources familiar with the matter say, as OPEC member Iran has not yet said whether it would participate in such a deal.
Most analysts expect the oil glut to last into 2017 or even 2018, resulting in low prices. Only by 2020 is there a consensus for prices to rise towards $70 a barrel, the report said, based on low investment in production.