Brent Oil Extends Drop as Iran Spurns Production Freeze Accord

Brent dropped for a second day as Russia signaled Iran won’t join major producers in freezing output to manage a global glut.

Futures lost as much as 0.9 percent in London after falling 2.1 percent Monday. Iran has “reasonable arguments” for not joining an alliance to cap production now, Russian Energy Minister Alexander Novak said after meeting with his Iranian counterpart. Talks on the freeze are most likely to occur in Qatar’s capital Doha next month, according to Gulf OPEC delegates. U.S. stockpiles probably expanded last week, keeping supplies at the most since 1930.

“Supply is still the key factor for the market,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “If there is a meeting and it does result in a decision on definitive action, that will be positive for prices, but history is against anything happening,”

Oil has rebounded after slumping to a 12-year low this year on speculation stronger demand and falling U.S. output will ease a surplus. Iranian production increased last month by the most in almost two decades following the end of international sanctions, the Organization of Petroleum Exporting Countries said in its monthly report Monday. Supply from Saudi Arabia was mostly unchanged.

Brent for May Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term declined as much as 36 cents to $39.17 a barrel on the London-based ICE Futures Europe Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and was at $39.22 at 11:07 a.m. Hong Kong time. The contract slid 86 cents to $39.53 on Monday. The global benchmark was at a premium of 67 cents to West Texas Intermediate for May.

Freeze Meeting

WTI for April delivery lost as much as 26 cents, or 0.7 percent, to $36.92 a barrel on the New York Mercantile Exchange. The contract fell $1.32 to $37.18 Monday. Total volume traded was about 30 percent below the 100-day average.

No countries have received invitations or an agenda for a meeting in Doha, said four OPEC delegates, who asked not to be identified because the matter isn’t public. The Qatari capital is one option as a location for the talks, said Russia’s Novak at the Russian embassy in Tehran, adding that he hopes Iran’s Oil Minister Bijan Namdar Zanganeh will participate.

U.S. supplies and OPEC output:

• U.S. crude inventories probably rose by 2.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
• Iran increased output by 187,800 barrels a day to 3.13 million a day in February, the biggest monthly gain since 1997, OPEC said in its report.
• The OPEC report made no reference to the Feb. 16 accord to freeze output, or to ongoing talks aimed at garnering support from other producers to participate.

--With assistance from James Paton To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Abhay Singh, Ovais Subhani

By: Ben Sharples

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