Oil fell below $33 per barrel on Wednesday after Saudi Arabia ruled out production cuts and an industry report said U.S. crude stockpiles hit a record, underlining the supply glut.
Saudi Oil Minister Ali al-Naimi said production cuts would not happen although more countries would join a deal to freeze output. OPEC and non-OPEC producers who support the idea are planning a mid-March meeting, his Venezuelan counterpart said.
“Al-Naimi’s remarks punctured an oil-price rally that has lacked substance,” said David Hufton of broker PVM. “The market correctly interpreted the presentation as bearish.”
Brent crude LCOc1 was down 76 cents at $32.51 a barrel at 0938 GMT. U.S. crude CLc1 fell 94 cents to $30.93. Both dropped more than 5 percent in intra-day trading on Tuesday.
Also pressuring prices, the American Petroleum Institute (API), an industry group, said on Tuesday crude inventories rose by 7.1 million barrels last week, far exceeding expectations of a 3.4-million-barrel rise.
The U.S. government’s Energy Information Administration, which said last week crude stocks hit a record high, releases its supply report at 10:30 a.m. EST (1530 GMT).