Published: March 18, 2016 |

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Brent crude prices backed off again on Tuesday as oil traders lost some confidence in the prospect of the oversupply easing.

In London, Brent crude traded down 2.3 percent to US$38.64 a barrel, while West Texas Intermediary futures lost 2.7 percent at US$36.15 a barrel.

It comes after OPEC downgraded forecasts of demand for its member’s crude in 2016.

The idea that Russia, Saudi Arabia and other OPEC member could freeze output levels had helped drive oil prices up above US$40 per barrel in recent weeks.

OPEC has been in sharp focus in the past 24 hours following Monday’s release of the cartel’s monthly market report.

Tom Pugh, analyst at Capital Economics, in a note highlighted that a drop in Iraqi oil production was more than offset by rising activity in Iran.

“OPEC production fell in February. However, temporary pipeline outages were the cause of most of the decrease in supply, rather than any concerted effort to cut production,” he said.

“Indeed, it is likely that OPEC’s production will increase over the next couple of months as Iran continues to boost its output.”

Source: (March 16, 2016) Proactive Investors

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