Oil prices remained weak after Saudi Oil Minister Ali Al-Naimi told oil executives on Tuesday that markets should not view the agreement by four major oil producers to freeze output at January levels as a prelude to production cuts.
Brent crude LCOc1, the global benchmark, slid 83 cents or 1.5 percent to $32.44 a barrel.
“Al-Naimi’s remarks punctured an oil-price rally that has lacked substance,” said David Hufton of broker PVM. “The market correctly interpreted the presentation as bearish.”
SHALE
Cheap oil has hit the economies of major crude producing countries hard and has been a major factor behind markets unrest in 2016.
In a sign of what might be in store, the Sovereign Wealth Fund Institute, a research organization, said on Monday that national rainy-day funds might take a further $400 billion out of global equities this year if oil stays between $30 and $40.
Low crude prices have also raised concerns that some U.S. shale oil producers could be forced into bankruptcy.
JPMorgan (JPM), the largest U.S. bank by assets, said on Tuesday it planned to increase provisions for expected losses on energy loans by $500 million.
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