Oil prices gained 5% on Tuesday but then gave back all that ground as talks between Saudi Arabia and Russia failed to reduce production.
Oil ministers from the two countries met on Tuesday and agreed to freeze production at current rates — a small step that will do almost nothing to reduce the massive supply glut.
Also attending those meetings were representatives from Qatar and Venezuela. Oil jumped to more than $31 a barrel and then fell below $30.
Officials promised that production discussions would continue.
“We will start intensive communication almost straight away with other major producers, OPEC, non-OPEC, including Iran and Iraq,” said the Qatari minister of energy and industry.
Saudi Arabia’s oil minister added: “We don’t want significant gyrations in prices. We want to meet demand and we want a stable oil price.” However, the Saudi minister added: “We don’t want reduction in supply.”
Both OPEC and Russia are pumping record amounts of oil, which has contributed to oversupply as demand in China has sunk as the economy has hit a roadblock.
While Nigeria and Venezuela have called for production cuts, other low cost producers in the Gulf have pushed back as they hope to push the US and other oil producers out of the market.
Adding to the oil glut is Iran, which has begun to massively increase its production and exports on the heels of US sanctions being lifted.
While Tuesday’s ground has been lost, oil prices jumped 12% alone on Friday, just one day after plummeting to $26.05, the lowest price experienced since May 2003.