Traders said only a Kuwait oil worker strike had arrested falls in the latest session.
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OPEC has become much more political and the last three failed meetings highlight the cartel’s inability to agree on much, says Ole Hansen, head of the Commodity Strategy at Saxo Bank.
The confluence of some 18 producing nations, including leading Opec (Organisation of Petroleum Exporting Countries) member Saudi Arabia and top non-Opec player Russian Federation had been expected to sign a deal to stabilise output at January levels until October 2016.
Asked whether the failed talks could result in further crude supply discounts for his company, Daniel Purba of Indonesia’s Pertamina, a major importer of refined products, said: “We hope so”.
Oil prices hit multiyear lows in February, but had edged up in the months since.
The deal had been meant to help the market rebalance by removing a large chunk of oversupply and a stockpile glut.
U.S. crude oil was trading $1.88 lower at $38.48 a barrel by mid-afternoon in electronic trading on the New York Mercantile Exchange. Brent crude fell as much as 7% when it opened after the meeting broke up in disarray.
Goldman Sachs said the Doha no-deal could result in a “bearish catalyst” for USA crude prices, which it forecast would average $35 a barrel in the current quarter.
Iraq’s crude production, including from fields in the semi-autonomous northern Kurdish region, is now at a level of between 4.7 million barrels a day and 4.8 million barrels, Al-Nima said.
“The market’s strength this morning definitely speaks volumes”, said Oliver Sloup, director of managed futures at brokerage iiTrader in Chicago. The IEA, a group of oil-consuming countries including the United States, added that by early April the drilling-rig count in the US had fallen almost 80 percent from the peak seen in October 2014 and that there was more anecdotal evidence of financial problems taking a toll on shale producers.
“Whatever happened in Doha, it wasn’t going to change production”, said Ian Taylor, chief executive of oil trader Vitol Group.
But prices recovered much of their losses by afternoon, and analysts said that oil is likely to rise in the longer term as many companies, particularly in the USA, scale back output.
But Saudi Arabia decided it would rather accept deflating prices than risk ceding market share to Iran, and the deal collapsed. Iran plans to increase its exports to two million barrels per day.
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The Stoxx Europe 600 index SXXP, -0.29% lost 0.2% to 342.11, after trading as low as 338.12 earlier in the day.
