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Investing.com -- U.S. crude futures fell sharply to fresh 12-year lows on Thursday, amid a bearish monthly supply report from OPEC and further indications that a deal between Russia and the world's largest oil cartel on potential cuts in production will not materialize.

On the New York Mercantile Exchange, WTI crude for March delivery traded between $26.12 and $27.48 a barrel, before settling at $26.14, down 1.27 or 4.54% on the day. The front month contract for U.S. crude has closed lower in six straight sessions and eight of the last nine. WTI crude futures previously hit a 12-year low on January 20, as traders prepared for the long-awaited return of Iran to world energy markets after a group of Western powers eased longstanding economic sanctions against the Persian Gulf nation.

Texas light, sweet futures have followed up a dismal year in 2015 by slumping more than 25% on the new year.

On the Intercontinental Exchange (ICE), brent crude for April delivery wavered between $29.93 and $31.11 a barrel, before closing at $29.98, down 0.86 or 2.83% on the session. With the late losses, North Sea brent futures dipped below $30 a barrel for the first time in two weeks.

Much like its U.S. counterpart, brent futures have extended sharp declines from last year, by crashing an additional 18% over the first six weeks of the new year.

Minutes after the close, Dow Jones reported that OPEC members are preparing to cooperate on potential production cuts according to UAE's energy minister. The comments boosted prices for both benchmarks by more than 0.50 a barrel.

Before the market-moving comments, U.S. crude fell to its lowest level since May, 2003, as investors reacted to significant increases in OPEC production last month. In January, the 13-member cartel ramped up production by 131,000 bpd to 32.33 million bpd, bolstered by increases from Saudi Arabia, Iraq, Iran and Nigeria. Saudi Arabia, the world's top exporter, rose output by 44,000 bpd in January to 10.091 bpd, near all-time record highs.

In addition, the cartel upwardly revised Non-OPEC supply for 2015 by 90,000 barrels per day to 1.32 million bpd, driven by higher than expected fourth-quarter data. It was nearly offset by expectations for a 70,000 bpd supply decline for 2016, amid widespread capital expenditure cuts by international companies, reduction in rig counts in North America and heavy decreases in production among older fields.

At the same time, the cartel left Non-OPEC world demand growth estimates unchanged for last year, while lowering forecasts for 2016 by 10,000 bpd. Crude prices have crashed more than 70% from their peak of $115 two summers ago, as global supply continues to greatly outpace demand. Earlier this week, the Paris-based International Energy Agency estimated that supply will outstrip demand by an average of 1.75 million bpd in 2016, slightly above forecasts of 1.5 million bpd last month.

There appears to be little signs that any major production cuts could be imminent. Addressing reporters on the sidelines of an international oil conference in London, Rosneft CEO Igor Sechin effectively quashed any speculation of an agreement between Russia and OPEC, which could have resulted in cuts of up to 5% in daily production. Reports of the looming possibility of a meeting between the major oil powers created a brief rally in crude prices last week.

'Tell me please who is going to cut? Russia isn't cutting. Who are we joining? Iran? Saudi Arabia? OPEC?,' Sechin said at the conference.

Production increases by Rosneft, Russia's state-owned oil and gas exploration company, helped drive national output above 10.8 million bpd in December. Russia, one of the world's top producers, is currently drilling oil near its highest level in the post-Soviet era.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.40% to an intraday low of 95.28 dropping to fresh three-month lows. The dollar has fallen by nearly 4% since the Federal Reserve opted to leave short-term interest rates unchanged at a meeting in late-January.

Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.