Oil backs off, Brent down 2.5% at £33.80

Doubts remain whether 'freezing' will be effective, or even possible.

WTI was down 3.6% at $32.20 per barrel.

Monday’s short lived oil rally is over, and on Tuesday crude prices backed off somewhat as traders continued to wrestle over what lies ahead.

Recent positivity has been largely predicated on hopes that cooperative measures agreed between Saudi Arabia, Russia and other producing countries may stem oversupply and support prices.

Doubts remain, however, and some market commentators believe that simply ‘freezing’ output at January’s levels, rather than reducing quotas, won’t go far enough.

In London trading, Brent crude was down 2.5% at $33.80 while West Texas Intermediary futures were down 3.6% at around $32.20.

Elsewhere, UK oil industry watchers were focussed on the North Sea where, according to new reports, investment into new projects is collapsing.

A report by Oil and Gas UK, the industry group, suggests just £1bn would be spent on new North Sea projects, down from £8bn per year over the past five years.

Exploration activity in the region is at an all-time low, it added.

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