Oil Falls on Skepticism Over Output Freeze Deal

Oil Falls on Skepticism  Over Output Freeze DealOil Falls on Skepticism  Over Output Freeze Deal

Oil futures fell almost 4% to below $39 per barrel on Friday, with the market growing increasingly skeptical that a looming deal to freeze crude production can help clear a global glut.

Brent crude for June delivery fell $1.48 to $38.85 a barrel, down 3.8%. Brent rose 6% in the first quarter of this year, its first such increase since a 15% rally in the second quarter of 2015, Reuters reported.

US crude fell $1.43 to $36.91 a barrel. Prices rose almost 4% over January-March, also the first quarterly gain since surging nearly 25% in the second quarter of last year.

Gains in the dollar after stronger-than-expected US non-farm payrolls data also hit dollar-traded oil by making the commodity less affordable to holders of other currencies.

Saudi Arabia will freeze its oil output only if Iran and other major producers do so, Saudi Deputy Crown Prince Mohammed bin Salman told Bloomberg in an interview, helping push prices lower earlier in the day.

US employment increased solidly in March and wages rebounded, signs of economic resilience that could allow a cautious Federal Reserve to raise interest rates gradually this year.

“I think (the payrolls report) is probably what’s sent us over the edge in oil,” CMC markets analyst Jasper Lawler said.

A Reuters monthly survey showed this week that OPEC output rose in March on higher supply from Iran after the lifting of sanctions and near-record exports from southern Iraq.

Oil prices fell despite China’s official Purchasing Managers’ Index showing an unexpected expansion in March, the first in nine months.

Putting a floor under prices in earlier trade was a drop in US crude output, falling for a fourth straight month in January to the lowest since October 2014.