Crude oil dips below $41 as doubts grow ahead of Doha meeting

“Our expectations for the meeting are low. Although an agreement on production caps is likely to be reached, it will probably not include any concrete figures or obligations, let alone any sanctions to be imposed in the event of non-compliance,” analysts at Commerzbank said. “In other words, the meeting will do nothing to change the current situation on the oil market.”

Jason Gammel, an analyst at Jefferies, said that if there is no agreement in Doha, there could be a snap back in prices given the high expectations ahead of the talks among investors.

Oil prices have jumped by more than a third since the idea of limiting production at current levels was first floated in mid-February but the rally has stalled in recent weeks amid uncertainty about the outcome of the talks.

Even if the meeting ends with a deal to freeze output, many analysts question whether it would be enough to alleviate the global glut of crude that has pressured prices for the past two years.

The International Energy Agency said in a report on Wednesday that “any deal struck won’t materially impact the global supply-demand balance” during the first half of 2016 as both Saudi Arabia and Russia are already producing at or near record rates.

Saudi Arabia pumped 10.19 million barrels a day in March, a decline of 30,000 barrels a day but still close to its peak levels, while Russia’s output hit a three-decade high in March at 10.91 million barrels a day, according to official statistics.

On Friday, traders were also digesting news that China’s economy, the world’s second biggest oil consumer, slowed further in the beginning of the year. Chinese gross domestic product expanded by 6.7% year-over-year in the first quarter, in line with forecasts and down from a 6.8% gain in the previous quarter.

Oil prices have been fluctuating since four big producers — Russia, Saudi Arabia, Qatar and Venezuela — in mid-February proposed a coordinated effort to cap future production as a way to prop up prices. News of the proposed measure lifted prices, which were hovering around 12-year lows at that time.

While this represented the slowest quarterly growth for China since the height of the financial crisis in 2009, Beijing’s policies to revive growth with tools such as lending and construction appeared to gain traction in March.

Later in the day, Baker Hughes Inc. will release the latest U.S. oil rig count numbers, viewed as a rough proxy for activity in the industry. Last week, Baker Hughes said the count fell by eight to 354 in the previous week and there are now about 72% fewer rigs from a peak of 1,609 in October 2014.

Nymex reformulated gasoline blendstock—the benchmark gasoline contract—fell 1.9% to $1.48 a gallon. ICE gasoil changed hands at $367 a metric ton, down $9.75 from the previous settlement.