Oil futures ended lower Monday, falling for a second consecutive session after Saudi Arabia late last week indicated it won’t participate in a coordinated production freeze unless Iran changes course and agrees to take part.
West Texas Intermediate crude oil for May delivery dropped $1.09, or 3%, to end at $35.70 a barrel — its lowest level since March 3. The U.S. benchmark fell 4% on Friday.
June Brent crude, the global benchmark, dropped 98 cents, or 2.5%, to end at $37.69 a barrel.
“The Saudis want to show that if the players at this meeting do not come to an agreement then oil prices will falter,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “Of course while the Saudis talk tough, the truth is they need a deal to freeze production as badly as anyone.”
Although current fundamentals are unlikely to support crude prices above $45 a barrel this year according to analysts, there could be some substantial deviation between the $30 and $40 marks depending on several factors which could impact the market.
In a note released Monday, Barclays warned of several factors that could seriously affect the fragile oil markets.
The bank added that it still expects the global crude surplus to narrow, but the idea that the market surplus will seamlessly fall to 800,000 barrels a day from 1.7 million barrels a day is false, according to Bloomberg MarketWatch.
May natural gas futures rose 4.2 cents, or 2.2%, to $1.998 per million British thermal units.
