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Oil prices drop amidst worries about output freeze

Crude oil prices dropped today when global bank Goldman Sachs was negative about the prospects of a prospective oil producer meeting being successful in handling the current global oversupply.

However, the crude prices did not fall too far, due to a firm demand outlook and a constricting supply side.

In early trading, the price of US crude oil climbed above $40 (£35.06) per barrel, spurred by a tightening market in the U.S. However, by the time it was 06:12 GMT, it had dropped to $39.56 (£334.67) – 16¢ lower than its worth at the close of business on Friday.

Meanwhile, the price of Brent crude was also down 16¢, commanding $41 (£36.62) per barrel.

Last week, U.S. crude oil prices had risen sharply after energy firms in the country cut oil rigs for three weeks in a row, reaching the lowest number since late 2009 in a bid to cut spending.

Brent made gains on production outages based in West Africa and the North Sea. This was due to hope that the April 17 meeting, which will see many of the world’s biggest oil producers get together to freeze output and tackle the glut of oil being overproduced at a rate of around a million barrels per day, will go ahead.

A freeze in oil output would also be good news for some of the biggest names in the oil industry, including Royal Dutch Shell, ExxonMobil and Fuchs, which produces Fuchs WSP 783-L add other leading oil-based products.

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