Brent crude plunged over 4.4 percent to $33.16 per barrel on Tuesday night after Saudi oil minister Ali Al-Naimi said the kingdom wouldn't be making production cuts and will instead focus on finalizing a deal to freeze output.
Speaking at the IHS CERAweek conference in Houston, Al-Naimi revealed that major oil producers would meet in March to negotiate the production agreement, which he expects to help ease the supply glut.
"The freeze I'm sure will give people in the market some hope, that something will happen and it will happen - but we are not banking on cuts because there is less trust," he said.
The minister again said he is optimistic that a pickup in demand would rebalance the global crude market.
“We are responding to geology and market conditions and seeking the best possible outcome in a highly competitive environment,” Al-Naimi said.
His comments came after OPEC’s secretary general Abdalla Al-Badri said a day earlier that a deal to freeze production could potentially lead to further action to tackle the oversupply problem.
Last week, Saudi Arabia, Russia, Qatar and Venezuela agreed on a proposal to cap production at January levels. Iran voiced its support for the move, without committing yet to the agreement.
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