Oil drops in Asia, markets unimpressed by output freeze talks

Oil benchmarks suffered a minor drop in Asia as markets have a tough time believing the major producers – Saudi and Iran – could agree to freeze output.

At the time of writing, WTI oil was down 17 cents or 0.37% on the day around 45.75/barrel. Brent was down 20 cents or 0.42% around $47.73/barrel.

There are growing talks of Saudi offering to cut production by 500K barrels per day; however, markets are not buying the rumors. Furthermore, Algeria Energy Minister also informed markets that Saudi is ready to freeze output at January levels. Experts believe Saudi freezing output at January levels will still leave the markets oversupplied.

Still, the speculation of production freeze refuses to die down as Iran’s supply is almost back to pre sanction levels, which means the nation may agree to some kind of compromise.