Oil traded below $31 a barrel after U.S. crude stockpiles rose to the highest in more than eight decades as Saudi Arabia and Russia propose to freeze output amid a worldwide surplus.
Iraq said Thursday it backs any decision to support prices and balance the market without indicating whether it would cap its own output.
“Inventories continue to build,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone.
“Not only is there downside risks to prices but there is also obvious limits to any upside potential.”
Crude is still down about 18 percent this year after the Organization of Petroleum Exporting Countries abandoned output targets in early December amid swelling U.S. stockpiles and as Iran seeks to boost exports to regain market share after sanctions were lifted.