NEW YORK (DTN) -- New York Mercantile Exchange oil futures ended lower this afternoon, pressured by bearish comments from oil ministers from Iran and Saudi Arabia that raised doubts the Organization of Petroleum Exporting Countries would freeze crude production.
Saudi Oil Minister Ali Naimi said at an industry conference in Houston that there were no plans by OPEC to cut production because that would amount to subsidizing non-OPEC producers, but he sidestepped a recent tentative agreement with Russia to freeze output at January's level if other OPEC members join in. Iran's oil minister Bijan Zanganeh dismissed talk of joining a production freeze with Russia and Saudi Arabia, calling a plan for Iran to freeze output at its January rate "ridiculous" and "a joke."
NYMEX April West Texas Intermediate crude futures settled $1.52 lower at $31.87 per barrle (bbl), moving into the nearby delivery position after the March WTI contract rolled off the board Monday at $31.48 bbl. The April-May contango at $1.73 bbl underlined short-term excess supply.
April Brent crude oil futures on the IntercontinentalExchange were down $1.42 at a $33.27 bbl settlement, with Brent's premium over WTI at $1.40 bbl amid record high inventory at the Cushing supply hub, the delivery location for NYMEX WTI futures.
In products trade, the NYMEX March ULSD futures contract settled 3.30 cents lower at $1.0221 gallon, off a better than one-week low of $1.0131, while March RBOB futures fell 3.43 cents to $0.9663 gallon.
On Wall Street, U.S. stock indices tracked euro-zone bourses lower while the dollar rose versus its peer currencies. The stock market was influenced by both falling oil prices and data showing weak German business confidence and slower growth in U.S. home sales.
Market sentiment has changed since Saudi Arabia and Russia agreed last week to freeze their production if other members of OPEC join them.
Iran, which produced 2.99 million bpd in January according to the International Energy Agency, plans to hike production to pre-sanction levels of roughly 3.6 million bpd.
Meantime, a Schneider Electric survey showed analysts are expecting crude inventories in the United States to have risen during the week-ended Feb. 19, with the average of the forecasts for a 2.2 million bbl stock build. At 504.1 million bbl, U.S. crude stocks are 18.4% higher than year-earlier levels and the highest since 1930.
The survey showed analysts expect gasoline stockpiles to have declined by 1.5 million bbl and distillate stocks to have been drawn down by 2.7 million bbl.
The American Petroleum Institute will issue its weekly supply report at 4:30 p.m. ET Tuesday while the U.S. Energy Information Administration's report is scheduled for release at 10:30 a.m. ET Wednesday.
George Orwel can be reached at email@example.com
© Copyright 2016 DTN/The Progressive Farmer. All rights reserved.