Investing.com - Oil prices retreated during European hours on Tuesday, falling towards six-week lows as concerns over a glut mounted after Venezuela said that global supplies needed to fall by 10% in order to bring production down to consumption levels.
Global oil supply of 94 million barrels per day needs to fall by about a tenth if it is to match consumption, Venezuela's Oil Minister Eulogio Del Pino said on Monday.
On the ICE Futures Exchange in London, Brent oil for November delivery dipped 25 cents, or 0.55%, to trade at $45.70 a barrel by 4:35AM ET (08:35GMT), not far from a six-week low of $45.31.
On Monday, London-traded Brent futures spiked higher after Venezuelan President Nicolas Maduro said that OPEC and non-OPEC countries were "close" to reaching a deal to stabilize oil markets. But prices ended well off the highs amid skepticism over whether such a deal can be agreed upon.
OPEC members, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28.
According to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Elsewhere, crude oil for November delivery on the New York Mercantile Exchange shed 27 cents, or 0.62%, to $43.59 a barrel. The contract touched a six-week low of $43.35 on Friday amid signs of an ongoing recovery in U.S. drilling activity.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 2 to 416, marking the 11th increase in 12 weeks.
Market players shifted their focus to weekly data from the U.S. on stockpiles of crude and refined products.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday.
The market is also waiting for the outcome of the Federal Reserve and Bank of Japan policy meetings on Wednesday for additional trading cues.