Market: Doha failure was predictable according to analysts – L’Express

Many analysts reacted to the failure of the informal summit in Doha, which therefore did not result in an agreement to freeze oil production. The price of a barrel are therefore in decline, that of WTI thus abandoning nearly 3% to 39.2 dollars to 11:20. Simple slump? sustainable return below 40 dollars? Some volatility is expected in any case on the front of the black gold.

Base case of Saxo Bank teams, this failure was in their view highly unlikely in view of the absence of Iran to the negotiating table. it was unclear indeed how an agreement could be signed without it. ‘This would have been to Saudi Arabia to give a blank check to Tehran in order to regain market share to its detriment’, which was even more unthinkable given the tensions between the two countries, summarizes the expert.

Announced by the Qatari Minister of Energy Mohammed bin Saleh al-Sada, the lack of harmony between producing and non-producing cohosh was after 6 hours of negotiations. ‘It seems that Saudi Arabia refused without any agreement that Iran has joined the negotiations,’ says Aurel BGC for its part, which further emphasizes qu”aucune date has been set for a new meeting. ‘

And the design office to relay the short term, however, according to the Bloomberg financial news agency citing data from the Petroleum Corp. public company, oil production of Kuwait dropped to 1.1 million barrels, a decline of 60%, following a strike of over 7,000 employees. ‘In this context Petroleum Corp. asked Egypt and India to send its specialists to Kuwait to participate in the work on oil sites’, reported Aurel BGC, which sees in this an element of consolidation in the short term.

It has also not escaped Sylvain Loganadin, DailyFX analyst for FXCM, that ‘Riyadh referred to the fact that increased its oil production is now possible in the absence of a agreement on a production freeze ‘. What immediately put downward pressure on the barrel of the course and, more broadly, raise fears of a growing divergence between the level of demand and supply of oil …

‘In Doha 16 producing countries had an appointment with the goal of stabilizing oil production. There was not the United States and Iran was there only observer ‘rewinds meanwhile Philippe Waechter, chief economist at Natixis AM, which reminded this morning that’ the desire, since the announced mid-February, was to stabilize oil production in January 2016 for signatory countries’.

‘A stabilization of production for two main producers would have to take the lead when US production would be reduced’, ‘the gap between supply and demand would have fallen so permanent and prices would then be reassembled, “added the expert, well aware qu”il is still rare to find a cooperation agreement to reduce production. ‘ If there is agreement, it is moreover at least as rare as it is maintained over time, and to do so requires that the market is unbalanced and that the price and income of producing countries have fallen sharply.

‘Generally, in this kind of situationq, there is always a country that produces a little more – it will not be seen – but ultimately foiled the agreement’, continued Philippe Waechter which expects a relapse of oil prices. 30 dollars according to him again a likely target, whereas the gap between supply and demand will not decrease rapidly – in true and expectations – and stocks remain high.

A chronic weakness is expected, at least until the next meeting.

(G.D.)