However, at the meeting, they failed to reach any consensus as Saudi Arabia retreated from freezing production until Iran’s participation.
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Saudi Oil Minister Ali al-Naimi declined to comment on this, while Qatari Energy Minister Mohammed Saleh al-Sada said that consultations would continue between the parties until an OPEC meeting in June. Iran didn’t even attend Sunday’s meeting, and Saudi Arabia has indicated in recent weeks that it is not willing to play ball unless Iran is involved in a production freeze.
Traders said that only a strike by oil workers in Kuwait prevented Brent from tumbling even more, while a cutback in drilling with the U.S.to levels of 2009 prevented steeper falls at that time.
The talks, which were expected to hold output at January levels until this October, finished once Saudi Arabia demanded unrepresented Iran should also sign up and threatened to hike output.
The OPEC/non-OPEC meeting in Doha failed to result in a freeze agreement, in line with our view.
The failure of major producers to take steps to bolster low oil prices reflects a schism within OPEC between its biggest member – Saudi Arabia – and Iran, which is increasing production after years of global sanctions. On March 23, Iraq oil ministry spokesperson, Asim Jihad said that the country has made a decision to stay mum on whether it would freeze production or not.
“Iran are more likely to increase their output, after years of sanctions, and this is the issue”, added Hughes.
An oil and gas analyst from MIDF Research said the initial collective agreement between oil majors was a positive indicator for oil prices going forward regardless of the outcome of yesterday’s meeting.
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.
Citigroup raised its 2016 price forecast for London’s Brent crude to $43 a barrel, and for West Texas Intermediate in NY to $42 a barrel, an increase of $3 respectively from its previous estimates, according to the bank’s report. The International Energy Agency estimates exports of Iranian crude oil rose to 1.6 million barrels per day in March – up around 100,000 bpd from February.
“While today’s lack of a freeze deal has no negative impact on balances – since Iran is really the only country likely to raise output substantially – it has a huge negative impact on sentiment, especially as the deal had been hyped up so much”, she said.
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Russia’s oil minister Alexander Novak said Moscow had not closed the door on a global deal to freeze output.
