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Global oil prices slip on receding hopes to tackle a supply glut

Global oil prices slip on receding hopes to tackle a supply glut

Oil market

Global oil prices have slipped to 47 US dollars per barrel on receding hopes for imminent action to tackle a supply glut.

A day after two heavyweight oil producers agreed to discuss ways to stabilise the oil market, the price of Brent crude jumped by 5 per cent but then fell to to stand 1.6 per cent.

On Monday, Russia and Saudi Arabia agreed to cooperate in the world oil market to overcome a supply glut that has sent oil prices to record lows.

“I definitely don’t think there is going to be an output cut any time soon. There is a slight chance of a freeze but given the close proximity of a series of meetings that we have got lined up now, this interim meeting with OPEC and Russia and this separate meeting with Russia and Saudi Arabia, then the official OPEC meeting later, I think this month it is very very unlikely we will see a freeze, just a coming together of minds setting up potential for a freeze in November,” said Jasper Lawler, a market analyst at CMC.

Other oil producers have welcomed the agreement between Saudi Arabia and Russia to stabilize the oil market, including limiting output.

Later this month, both OPEC and non-OPEC producers such as Russia will hold informal talks in Algeria.

OPEC supplies about 40 per cent of the world’s oil pumping 32.5 million barrels per day.