Oil prices slip lower but losses held in check

© Reuters. Oil prices turn lower as analysts say Doha meeeting will have limited impact on overproduction© Reuters. Oil prices turn lower as analysts say Doha meeeting will have limited impact on overproduction

Investing.com – Oil prices slid lower on Monday as analysts warned that a planned meeting of major oil producers in Doha later this month would have only a limited effect on curbing global overproduction.

for May delivery on the New York Mercantile Exchange was down 23 cents, or 0.58%, to trade at $39.49 a barrel by 08.18 GMT.

Global benchmark fell 22 cents to $41.73.

Barclays (LON:) warned that the results of the producer meeting, planned in Qatar for April 17, would have a limited effect on supply, given that the producers that have the potential to grow output (Iran, Iraq) are not involved in the freeze.

In addition, Goldman Sachs (NYSE:) noted that a production freeze at recent output levels would not accelerate the rebalancing of the oil market.

Oil prices have rebounded from 12-year lows hit in February with hopes that key producers will agree on a plan to cap output in order to tackle a global glut playing a major part in the recovery.

Global overproduction is currently estimated at about 1 million barrels per day in excess of demand.

Indications that U.S. shale oil producers are cutting back on drilling activity have also boosted prices.

Oil prices rallied on Friday after data showing that U.S. crude inventories and the U.S. oil-rig count fell.

Baker Hughes reported that the number of U.S. oil-drilling rigs, viewed as a proxy for activity in the sector, fell by eight to 354 in the latest week.

fell by 4.9 million barrels in the week ended April 1.

But U.S. crude oil inventories are standing at 529.9 million barrels, historically high levels for this time of year, according to the U.S. energy department.

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