Oil prices slipped on Monday after banks dampened hopes that the meeting of producers in Doha next Sunday, aimed at freezing current output levels, would improve the demand-supply balance.
Brent crude futures, the global benchmark, fell by 10 cents to $41.84 a barrel, retreating from last week's rally to a three-week high reached on Friday after a drop in the rig count of US drillers to its lowest since November 2009, Reuters reported. US WTI crude also eased on Monday, falling to $39.50 a barrel, down 22 cents from the previous session.
"Prices will move back and forth this week on expectations for Doha. This morning it seems that speculation is being scaled back again," Commerzbank senior oil analyst Carsten Fritsch said. Analysts at Goldman Sachs, who expect oil prices to average $35 a barrel in the second quarter, cautioned that the outcome of the meeting in Qatar could prove bearish for the market. A production freeze at recent levels would not accelerate a rebalancing of the market, the analysts said, citing Russian and non-Iranian OPEC output that has remained close to the bank's 2016 average annual forecast of 40.5 million bpd.
Azerbaijan, whose energy minister will attend the Doha meeting, said on Monday that its output had dropped by 1.6% in the first quarter compared with a year earlier to 10.496 million tons.
