Oil fell below $49 a barrel on Tuesday, giving up part of August’s strong rally, as signs of rising supply outweighed hopes that producing nations will agree steps to support prices.
A Nigerian militant group, which has claimed a wave of attacks on oil facilities, said at the weekend it was ready for a ceasefire and Iraq resumed pumping through a northern pipeline halted earlier this year, Reuters reported.
Brent crude was down 59 cents at $48.57 a barrel. The global benchmark rallied 20% between the beginning of the month and Aug. 19. US crude was down 62 cents at $46.79.
“Today we remain bearish on crude oil,” said Georgi Slavov, analyst at Marex Spectron. “Supply looks likely to increase in the short term.” Oil prices have more than halved from mid-2014 due to a global supply glut.
Raising hopes that producers could revive efforts to tackle excess supply, Saudi Arabia’s Energy Minister Khalid al-Falih said on Aug. 11 OPEC and non-members will discuss the market next month, including any action that may be needed.
The International Energy Forum, which groups producers and consumers, is due to meet on September 26-28 in Algiers.
A previous attempt by producers to freeze output collapsed in April amid tensions between Iran and Saudi Arabia, and the refusal of some countries to join. Analysts remain skeptical concrete action will result this time.
“We see too many headwinds and logistical challenges to a meaningful deal,” Morgan Stanley said in a report.
Investors are also looking for clues on whether the US Federal Reserve will raise interest rates this year. Fed Chair Janet Yellen will give a speech at a global central banking conference in Jackson Hole, Wyoming, on Friday.
