Oil tumbles as traders bet on weak Doha meeting | Fin24
 
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • Dudu Myeni

    The former SAA chair has been declared a delinquent director for her role at the national airline.

  • Cigarette Ban

    Govt says emerging research shows smoking leads to more severe cases of Covid-19.

Loading...

Oil tumbles as traders bet on weak Doha meeting

Apr 17 2016 13:00

New York - Oil prices tumbled Friday as traders bet that a key producers meeting in Doha this weekend will yield no effective measures to curb the global oversupply.

US benchmark West Texas Intermediate (WTI) for delivery in May slid $1.14 (2.7%) to $40.36 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for June delivery, the international benchmark, closed at $43.10 a barrel, a decline of 74 cents (1.7%) from Thursday's settlement.

Sunday's meeting in the Qatari capital is expected to gather about 15 countries, mostly of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and some non-OPEC producers such as Russia.

"The market of course is under pressure in anticipation of this Doha meeting," said Andy Lipow of Lipow Oil Associates.

"Expectations are just so low that OPEC and non-OPEC producers will do anything with significant details attached to it," Lipow said.

"I actually expect they are to announce a freeze from levels of production seen in January or February or a combination of both, without assigning an actual number to it and leaving to the market to interpret how much production that actually means."

The market rose this week on optimism that major producers could agree a production freeze to address the persistent global oversupply that has pushed prices down roughly 60% since mid-2014.

Analysts said the outcome of the meeting could send the market soaring or crashing.

OPEC kingpin Saudi Arabia insists it will not join an output freeze unless regional rival Iran does so. Iran, which is emerging from nuclear-related sanctions lifted in January, is expected to seek a waiver until its production reaches its pre-embargo levels.

In a surprise twist on Friday, Tehran announced that Oil Minister Bijan Zanganeh would not join the talks - which will instead be attended by the Islamic republic's OPEC representative.

In a statement carried by the Shana news agency, the Iranian ministry also noted that "Iran already announced it cannot join the plan to stabilize oil prices" while its output is still below pre-sanction levels.

"Iran supports efforts... to stabilize the market and support prices," oil ministry spokesman Akbar Nematollahi was quoted as saying.

"Iran's representative will go to Doha to explain the position of Iran and revive efforts to improve the market situation."

opec  |  commodities  |  markets  |  oil
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote

Loading...