Oil erased its gains for the year in New York as Saudi Arabia’s deputy crown prince said the kingdom will only freeze production if Iran and others follow suit.
Futures capped a weekly decline of 6.8 percent, the first since mid February. With producers scheduled to meet in Doha this month to complete an accord on capping output, Saudi Arabia’s Mohammed bin Salman signaled in an interview with Bloomberg that if any country raises output, the kingdom will also boost sales. While Iran will attend the talks, it has ruled out limiting supply as it restores exports after sanctions were lifted in January.
“The Saudis are now saying that they will only freeze if everyone else lines up behind the idea,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “That makes the meeting useless since the Iranians are going to continue increasing output.”
Oil rose 14 percent in March as it rebounded from a 12-year low amid speculation the global glut will ease as U.S. output falls.
Russia will join Oman and every member of the Organization of Petroleum Exporting Countries (OPEC) apart from Libya in Doha on April 17 to discuss freezing production.
OPEC members, led by Iran and Iraq, boosted output in March.
West Texas Intermediate for May delivery fell $1.55, or 4 percent, to close at $36.79 a barrel on the New York Mercantile Exchange. It was the lowest settlement since March 15. Total volume traded was 10 percent below the 100-day average at 2:46 p.m. Prices rose 3.5 percent last quarter.
Brent for June settlement fell $1.66, or 4.1 percent, to $38.67 a barrel on the London-based ICE Futures Europe exchange. The May contract expired Thursday after gaining 34 cents to $39.60. The global benchmark crude closed at a 47-cent premium to WTI for June delivery.
“If all countries agree to freeze production, we’re ready,” Saudi Arabia’s bin Salman said. “If there is anyone that decides to raise their production, then we will not reject any opportunity that knocks on our door.”
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