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April 3, 2016

Oil prices down as hopes on output freeze agreement by oil producers fade

Oil prices have fallen as hopes faded on an agreement between major oil producers to curb overproduction.

Oil prices have fallen as hopes faded on an agreement between major oil producers to curb overproduction.

Brent crude futures rose 1 cent higher at $38.68 a barrel, while the US crude futures were 8 cents lower at $36.71 a barrel, Reuters reported.

Mehr news agency reported Iran Oil Minister Bijan Zanganeh saying that the country will continue to increase its production and exports until it gets back the market position enjoyed by it before the imposition of international sanctions.

"That’s probably what we’ll see over the next three weeks: more speculation and more verbal intervention."

Zanganeh also said that the agreement between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members is a positive step.

In February, the initial output freeze proposal was announced by Saudi Arabia, which said last week that it would join such effort to on condition if Iran and other producers did so.

This announcement has raised doubts whether the exporters will reach any such agreement after they meet in Doha this month.

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ABN Amro chief energy economist Hans van Cleef told the news agency: "That’s part of a normal cycle that I think can continue this week, we might see $36 or $37 … Prices are coming down because of speculation Saudi Arabia will not join (the freeze deal) and that’s probably what we’ll see over the next three weeks – more speculation and more verbal intervention."

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