Oil falls below $40 as Iran dashes hopes of output freeze

Oil prices slipped below $40 again on Monday, bringing to halt a week-long rally after Iran said it would not join any deal to cap production until its output hits 4 million barrels per day (bpd).

Brent crude fell 1.68 percent to $39.71 per barrel (bbl) and WTI crude was down 2 percent to $37.73/bbl.

“They should leave us alone as long as Iran's crude oil has not reached 4 million. We will accompany them afterwards,” Iran's oil minister Bijan Zanganeh said Sunday.

Saudi Arabia-led OPEC and Russia have agreed to freeze production at January’s record-high levels in an attempt to stabilize the global oil market. The deal, however, hinged on all OPEC members– including Iran and Iraq – joining in.

Crude oil prices, which hit a record low last month, had been climbing last week on hopes of decline in supply. Brent crude, the benchmark for half of the world’s oil exporters, touched a high of $41.07/bbl.

The IEA said last week that oil prices appeared to have bottomed out after output from OPEC and non-member producers eased in February, while Iraq, Nigeria, and the United Arab Emirates saw disruptions.

Active rig counts in the U.S. also plunged to their lowest level since December 2009, according to the latest data from Baker Hughes Inc. 

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com