Oil futures are under pressure as traders are looking forward to the official U.S. crude stock data to be published today. Also, lack of any new development from OPEC’s end over measures on an output freeze has kept market participants cautious.

Maintaining near $40 handle

During the early European hours, Brent Crude was trading 0.96% down at $41.39 while West Texas Intermediate fell 1.11% to $40.99.

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Crude prices have been hovering around $40 per barrel mark over the last few sessions as oil traders remain anxious over global oil stock reserves. The sentiment is skewed towards bears as the American Petroleum Institute (API) reported an increase of 8.8 million barrels for the last week. The steep surge in oil stocks indicates that there is no improvement in the oil glut situation. Still, the market is now eyeing the U.S. Department of Energy report, which is considered more accurate.

Production cut will make sense

Investment analyst Daniel Ang at Phillip Futures underscored that the cut in U.S. production is imperative for the global oversupply to ease down. He added that only a production cut has the ability to drive up oil prices.

Apart from this, the upcoming meet between OPEC and non-OPEC members on April 17 will be of prime importance to traders. Oil producing nations are expected to reach an agreement on a production freeze to January levels. However, Iran has already expressed its inability to join such a meeting as it stated its objective of regaining oil market share after termination of Western sanctions.

Though the talks are considered crucial, analysts still warn that any output freeze won’t work meaningfully until steps are taken to cut output. Ang has kept the price outlook for the commodity near $35 per barrel through the first half of 2016.

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) traded 0.53% lower to $5.66 during the previous session.