Oil has fallen back from one-year highs, knocked by concern that a production cut by the world's largest exporters might not be enough to erode a two-year old global surplus of unwanted crude oil. Hayley Platt reports
The rise in oil prices at the start of the week didn't last long. After hitting one year highs on Monday, both Brent crude and U.S. futures slipped back Markets unconvinced a long-awaited deal between the Saudi-led OPEC cartel and its non-OPEC members over output will ever be reached. Iran, who's economy is heavily reliant on oil, is a firm NO, Russia, a maybe. It follows a modest cut in production from last month's meeting in Algeria and an energy summit in Turkey. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "What is causing some cynicism and potentially some backsliding is that we don't know how that's going to be allocated across the various members and clearly with Libya and with Iran and Nigeria given some leeway with which to increase production that puts the onus on a lot of the other producers most notably Saudi Arabia to take most of the production cut on themselves." The International Energy Agency believes oil markets could be rebalanced if a deal can be struck. But the cuts would need to be steep and that's unlikely. Even though President Putin seems to be warming to a production cap, Rosneft - Russia's main energy supplier - isn't. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "I think the pressure remains on the oil price. There's a lot of wishful thinking in the market right now for higher prices both to address the problems of free cash-flow amongst the oil majors but also shoring up the balance sheets of the dependant governments." OPEC's next meet up is in November. Where the delicate matter of how much each of its members will produce will - it's hoped - finally be decided.