Oil retreats as Saudi Arabia, Russia freeze output

DUBAI: Oil dropped on speculation that a pledge by Saudi Arabia and Russia to freeze production at January levels won’t succeed in tackling the global oil surplus.

Crude fell after climbing as much as 7.1% in New York and 6.5% in London. The agreement depends on other producers following suit, Qatar’s Energy Minister Mohammed bin Saleh al-Sada told reporters in Doha Tuesday. The pact won’t be meaningful unless Iran and Iraq, who have been raising output, co-operate, Commerzbank AG said. Saudi Arabia’s Ali al-Naimi said the freeze could be followed by other steps to improve the market. “The market is reacting rationally,” said Mike Wittner, head of oil-market research in New York at Societe Generale.

“There’s been a lot of chatter about a possible cut over the last month, so the reaction has got to be is this the best we can do? I struggle to find anything bullish in this announcement.”