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1st LD Writethru: Oil prices drop amid disappointing output freeze deal

Xinhua, February 17, 2016 Adjust font size:

Oil prices lost Tuesday as top producers Russia and Saudi Arabia disappointed the market by agreeing only to a conditional output freeze.

Russia and OPEC members Saudi Arabia, Venezuela and Qatar said they had reached a preliminary deal to freeze output at January's level, but only if other major producers followed suit.

The market is casting doubt about whether other big producers like Iran and Iraq would like to follow suit.

Persistent oversupply, bloated inventories and a slew of negative economic news dragged crude prices to a 12-year low last week.

OPEC crude oil production averaged 31.6 million barrels per day (b/d) in 2015, an increase of 0.8 million b/d from 2014, led by rising production in Iraq and Saudi Arabia, according to the energy outlook released by U.S. Energy Information Agency (EIA). Russian output hit a new post-Soviet record in January.

The West Texas Intermediate for March delivery moved down 40 cents to settle at 29.04 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery decreased 1.21 dollars to close at 32.18 dollars a barrel on the London ICE Futures Exchange. Endit