Oil prices fell more than 5 percent and US crude dipped below USD 30 on Tuesday, dented by worries about the demand outlook and rising supply, while hopes for a deal between OPEC and Russia on output cuts faded.
Brent for April delivery had dropped USD 1.81, or 5.3 percent, to USD 32.43 a barrel by 9:42 a.m. ET (1442 GMT), after settling down USD 1.75, or 4.9 percent, in the previous session.
The front-month contract for West Texas Intermediate (WTI) was down USD 1.57 at USD 30.05, having dipped below USD 30. It fell USD 2, or 5.9 percent, the session before.
But Goldman Sachs said it was "highly unlikely" the Organization of the Petroleum Exporting Countries would cooperate with Russia to cut output, saying such a move would also be self-defeating as stronger prices would bring previously shelved production back to the market.
"It's hard to see a successful agreement between OPEC and Russia to cut production and people are starting to see that," said Andy Sommer, senior energy analyst at Axpo Trading in Dietikon, Switzerland.
Didier Houssin, president of French Institute for Petroleum and New Energies said that a deal would benefit Russia and OPEC's main competitor, the United States.
"There is no way US producers will respect any OPEC – Russia deal meanwhile, they will be the first to benefit from any price recovery by ramping up production," Houssin said.
Underlining the well-supplied nature of the market, Russia's oil output rose to 10.88 million barrels per day (bpd) in January, from 10.83 million bpd in December, Energy Ministry data showed on Tuesday.
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