Oil prices, which had rallied by more than 60 per cent from January lows on prospects that an agreement to freeze production will be reached, crashed on Monday.
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“The general conclusion was that we need more time to consult among ourselves in OPEC and non-OPEC producers”, al-Sada said, referring to the Organization of the Petroleum Exporting Countries (OPEC).
The price of Brent crude oil, the global benchmark, fell as much as 7 percent on Monday before recovering, settling around $41.96 by mid-morning.
But the deal crumbled when OPEC heavyweight Saudi Arabia demanded that Iran join in despite its repeated assertions it would not do so until it had reached pre-sanctions levels of output.
Iran is seeking to boost crude production and exports after years of sanctions.
In OPEC’s latest monthly oil market report, the group said it expects global oil demand to grow by 1.54 million barrels per day, down by about 50,000 bpd from the group’s previous forecast.
“The higher oil prices will definitely be positive for Malaysia’s fiscal position”.
After snuffing talks to freeze world oil production at a key meeting in the Qatari capital of Doha last weekend, Saudi Arabia said Thursday the door “remains open” to such a deal. OPEC’s goal is to keep supplies at levels that ensure stable prices and healthy profits for members. “I expect $65 maybe even $70 oil price nine to twelve-months from now”.
“Iraq’s view is to have a freeze in output for a short period to help protect the interests of both producers and consumers equally by easing the surplus from the market and improving prices”.
The cheap oil price has a huge impact on the economies of crude-producing countries, particularly the poorer ones like Angola, Nigeria and Venezuela. Iran wants to increase its production by a third, to four million barrels per day. “If there is anyone that decides to raise their production, then we will not reject any opportunity that knocks on our door”, he said in an interview with Bloomberg News.
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With only a strike among Kuwaiti oil workers that started yesterday likely to effect the downside oil, energy stocks and commodity-linked currencies have all dropped sharply this morning.
