Oil prices have fallen more than 2% due to doubts of whether freezing output will have any impact on the global oversupply.
Brent crude futures LCOc1 fell 1.8% and traded at $34 a barrel, while the US crude futures CLc1 dropped 2.2% to $32.63 a barrel, Reuters reported.
Oil exporters including Russia, Saudi Arabia, Qatar, and Venezuela have agreed to freeze output at January levels only if other producers are ready to follow.
Energy Aspects analyst Dominic Haywood told the news agency: "If they freeze production at January levels when you’re already over supplied by around a million barrels per day it just prolongs that situation of oversupply."
Iran is not expected to agree to a cut production and is producing at high levels after international sanctions are lifted.
Organization of the Petroleum Exporting Countries (OPEC) secretary-general Abdullah al-Badri said that the cartel and non-OPEC members may later on take other steps to curb the supply glut in case a deal between the producers proves successful.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Projections released by the International Energy Agency that shale oil production in the US may fall by 600,000bpd in 2016 and another 200,000bpd in 2017, leading to an increase in oil prices by more than 5%.
Image: Russia, Saudi Arabia, Qatar, and Venezuela have agreed to freeze oil production. Photo: courtesy of Sura Nualpradid / FreeDigitalPhotos.net.