Oil prices slide back to $48 after two-day jump
Oil prices fell today after a seven per cent rise in the last two sessions as doubts grew over the ability of Opec's output cut to accelerate the stricken market's recovery.
Brent crude, the global benchmark, fell as much as 1.77 per cent to $48.62 per barrel in mid-morning trading, having settled up about 1.1 per cent in the previous session.
Read more: Where big banks think the oil price is heading next
Its US counterpart, West Texas Intermediate, also slumped as much as 1.65 per cent to $47.04 per barrel.
The Organisation of the Petroleum Exporting Countries (Opec) said earlier this week that it would cut output to a range of 32.5-33m barrels per day, from about 33.5m estimated by Reuters.
However, the key details, including the quotas for each member and the implementation data, will be finalised at Opec's official meeting in November.
Meanwhile, analysts said while the cut was small when compared to global production levels, it does show that de facto leader Saudi Arabia still wants the politically divided oil cartel to carry some clout.
Read more: Oil price sinks after Iran and Saudi Arabia play down prospects of an output freeze
"It's incredible," Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance, told Reuters when asked about the oil price moves.
"In essence the 700,000 barrel per day cut is a minute amount compared with total production, but it marks a turnaround by Saudi Arabia to preserve Opec," he added.