Oil prices are soaring in early Asian trading after the IEA Chief’s statement about declining supplies.
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Oil prices are heading south after the world’s top producers failed to reach a deal on freezing output.
Iran’s absence from the meeting was due to the country’s ambition to ramp up production by one million barrels per day (bpd) to 3.9 million bpd, the level it produced to the sanction in 2007.
Saudi Arabia, the world’d largest oil supplier and the most powerful OPEC member, sought unanimity for any production freeze. United States producers have lost their potential of investing in growth opportunities amid a substantial decline in crude prices from $120 a barrel to below $30 a barrel.
But a freeze, no matter how many countries join, won’t have a real, fundamental impact on prices, according to analysts, as supply would continue to outpace demand.
It is unclear how long the strike, by thousands of Kuwaiti oil and gas workers protesting a government plan to overhaul public-sector salaries, will last, the news agency Reuters said.
Ross, chairman and CEO of private equity firm WL Ross & Co, told CNBC on Monday that prices would range between $35 and the low $40s in the near future. Tensions between regional antagonists Saudi Arabia and Iran have flared as they take opposite sides in bloody conflicts in Yemen and Syria.
Iran, which is reviving oil exports after global sanctions were lifted in January, ruled out any limits on its output before reaching pre-sanctions levels, dismissing the notion of joining the freeze as “ridiculous”. The 45% increase in production sent prices from north of $30 a barrel to south of $15, with some heavier, sour grades changing hands for well below $10.
The April 17 meeting in Qatar was attended by Russian Federation and most member of the Organization of the Petroleum Exporting Countries (OPEC) – but not Iran. “That is to say, to many cargoes and not enough tankers”, the director of Wimpole International told Trend on April 19.
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On the flip side, Iran is looking to expand its production over 4 million barrels a day in the coming days. Oil had been on an uptick on optimism that a deal would be reached at the meeting.
