Oil futures fell by over 1.5% on Thursday (2 March), after Russian energy minister Alexander Novak labelled market chatter about a possible production cut extension by Opec and non-Opec producers as "premature" and US inventories rose to another record high.
At 5:13pm GMT, the Brent front month futures contract was down 1.81% or $1.02 to $55.34 per barrel, while the West Texas Intermediate (WTI) was 1.86% or $1.01 lower at $52.73 per barrel, after Novak quashed recent speculation that out cuts were due to be extended in the summer.
Opec next meets on 25 May, with the previous agreement between the cartel and 11 other producers, including Russia, to reduce output by 1.8m barrels per day (bpd), valid until end-June.
But Novak noted told Reuters: "It is premature to talk of what we will discuss in April-May. The technical possibility of the deal extension is envisaged by the agreements."
Meanwhile, the US Energy Information Administration (EIA) reported commercial crude oil inventories rose by 1.5m barrels for the week ending 24 February, yet another record high. The EIA also said total domestic US crude oil production also rose slightly from the previous week to 9.03m bpd, with inland gains reported in both shale and in Alaska.
Michael Wittner, global head of oil research at Société Générale, said: "US inventories moved directionally in line with expectations, and with relatively small stock changes across the board. Stats were bearish for crude and bullish for gasoline and distillate – the typical pattern for the American refinery maintenance season."
Away from the oil market, precious metals continued to register massive slides as the dollar remained strong, with gold sliding below $1,235 an ounce from $1,250-levels earlier in the week.
At 5:50pm GMT, the Comex gold futures contract for April delivery was down 1.39% or $17.40 at $1,232.60 an ounce, while spot gold was trading at $1,233.14 an ounce, down 1.31% or $16.34.
FXTM research analyst Lukman Otunuga said gold may be destined to display explosive levels of volatility in March, as uncertainty coupled with the prospects of higher US interest rates prompts investors to offload and reload positions in an effort to be on the winning side.
"Although political risks in Europe, Brexit woes, and Trump developments may support the metal in the medium term, a resurgent dollar from revived rate hike expectations has exposed the metal to downside risks this week. From a technical standpoint, weakness below $1,235 could spark a further selloff back towards the $1,220 higher low."
Elsewhere, Comex silver was down 4.05% or 75¢ at $17.74 an ounce, while spot platinum was up 2.86% or $29.03 lower at $987.25 an ounce.