NEW YORK (DTN) -- New York Mercantile Exchange oil futures ranged lower at the start of regular trade Monday ahead of the release of a monthly supply and demand report by the Organization of Petroleum Exporting Countries.
OPEC's March Oil Market Report is set for official release at 11 a.m. ET.
The oil complex retreated after Iran's oil minister Bijan Zaganeh said on Sunday that Tehran wouldn't join a crude oil output freeze plan designed last month by Russia and Saudi Arabia until its own output recovers to 4.0 million bpd. Qatar and Venezuela are among OPEC members who had already said they were open to joining the Saudi-Russian plan to freeze production at January levels.
Iran's comment dashed any hope of a deal, analysts said.
Aside from OPEC, an upturn in the value of the U.S. dollar and short-term technical pressure also pressed oil futures lower.
At 9 a.m. ET, NYMEX April West Texas Intermediate crude futures fell $1.06 to $37.44 bbl after reversing off Friday's three-month spot high of $39.02. May Brent crude futures trade on the IntercontinentalExchange fell $1.09 to $39.30 bbl, near a one-week low of $39.15.
In products trade, NYMEX April ULSD futures tumbled 3.16cts to $1.1864 gallon, near a one-week low of $1.1840. April RBOB futures dropped 2.15cts to $1.4228 gallon, off a three-session low of $1.4146.
On Wall Street, U.S. stock indices eased while the dollar edged up heading into a busy week that includes a policy meeting by the Federal Reserve. Fed watchers are looking for the central bank's outlook on the economy but don't expect a hike in interest rates.
Oil futures rose on Friday after the International Energy Agency revised down its outlook for production this year for nonmembers of the Organization of Petroleum Exporting Countries, projecting non-OPEC output to decline 750,000 bpd this year to 57.0 million bpd. Still, production was 1.8 million bpd above year prior, with a slight year-on-year decline in output by non-OPEC more than offset by an increase in production among cartel members.
Domestically, the Energy Information Administration detailed a 3.9 million bbl crude stock build for the week-ended March 4 to 521.9 million bbl, 16.3% higher than year prior levels and a new weekly high.
"Incoming data on the supply side for oil have helped sow the seeds of a recovery," said Barclays Capital in a note to clients. "Demand growth data for this year thus far are, however, softer than in the same period last year. At least two quarters of prices below $40 bbl as implied by our forecasts, are required to balance the oil market."
Analysts have also indicated domestic crude oil prices above $40 bbl would generate forward hedging to lock in values and begin a return in U.S. shale oil production on favorable drilling economics.
George Orwel can be reached at firstname.lastname@example.org
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