Oil Prices Fall as Saudi Arabia Rules Out Output Cuts

The Brent crude benchmark price for oil fell on Tuesday, reversing Monday's gains and relapsing to less than $33.50 per barrel after Saudi Oil Minister Ali Naimi ruled out production cuts earlier Tuesday.

MOSCOW (Sputnik) — Brent crude ICE futures fluctuated around $34 per barrel throughout Tuesday afternoon before falling nearly 4 percent to $33.28 per barrel by 17:50 GMT. WTI crude was nearly 5 percent in the red, dropping from over $33 per barrel to below $31.80 per barrel by late afternoon.

Brent May 2016 futures were over 4 percent in the red, standing at $31.84 per barrel by 18:00 GMT. WTI March 2016 futures fell 5 percent, dipping below $34 per barrel by 18:00 GMT.

Markets reacted to Saudi Oil Minister Ali Naimi's earlier comments regarding Saudi Arabia's stance on output cuts. Speaking at the IHS CERAweek conference in Houston, the minister stressed that production cuts are unfeasible due to a lack of oil producing countries willing to deliver on such promises, media reports said. Naimi added that freezing production may eventually lead to a reduction of oil inventories.

The WTI crude benchmark fell despite forecasts by the International Energy Agency (IEA) of possible falls in US oil production. According to the IEA's Monday report, US oil output may shrink by some 600,000 barrels per day and a further 200,000 barrels per day in 2017.