Oil prices extended losses from the previous session today, as oversupply concerns clipped the wings of a six-week rally which had stemmed from optimism that the market had bottomed.
Rising US stockpiles and Iran's refusal to join an a deal to freeze output at January levels, led by de facto Opec leader Saudi Arabia and Russia, could suggest crude prices have gained too much in recent weeks.
"With the focus still on an output agreement, oil markets are likely to remain susceptible to further sell-offs as producers baulk at cutting production," ANZ said in a note on Tuesday.
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Brent crude, the global benchmark, fell 0.8 per cent to 39.2 per barrel this morning. Meanwhile, West Texas Intermediate crude, the US benchmark, slumped 0.7 per cent to $36.9 per barrel.
De facto Opec leader Saudi Arabia reported it kept production level in February at 10.22m barrels per day, seemingly following the terms of the yet to be finalised freeze deal with Venezuela and Qatar and Russia.
Iran reported it pumped around 3.39m barrels per day, about 250,000 more than the secondary sources' estimate.
Russia signalled yesterday it is getting close to a deal with Opec, despite Iran's absence.