Oil prices hit one-month lows as prospects of top exporters agreeing to curb chronic oversupply faded, while other commodities also lost ground as the dollar steadied after Friday’s strong U.S. data.
Wall Street looked set to open higher, according to index futures ESc1 1YMc1 SPc1, after shares rose sharply in Europe and modest gains in Asia.
Brent crude LCOc1, the international benchmark, fell as far as $38.18, its lowest since March 4, before recovering to trade up 18 cents at $38.85.
Prices have fallen from above $100 a barrel since mid-2014 on a supply glut, troughing at $27.10 in late January. Brent topped $42.50 last month in anticipation of agreement among producers to freeze output.
However, last week a Saudi prince reportedly said the kingdom would only freeze output if Iran and other producers did the same. Iranian Oil Minister Bijan Zanganeh was quoted as saying at the weekend that his country would increase production and exports until it reached the position it occupied before sanctions were imposed over its nuclear program.
“Prices are coming down because of speculation Saudi Arabia will not join (the freeze deal) and that’s probably what we’ll see over the next three weeks – more speculation and more verbal intervention,” ABN Amro chief energy economist Hans van Cleef said.