OPEC: oil relapse after the failure of the Doha negotiations – L’Express

The failure of the Doha discussions ended the rise in oil prices on Monday. Oil prices fell after Sunday together producing countries have failed to decide on a production freeze. By late afternoon, however, the decline was less severe than expected.

The decline in prices was, however, modest. The price of “light sweet crude” (WTI) lost 58 cents to 39.78 dollars on the New York Mercantile Exchange (Nymex), a much more severe decline than what was feared. However, “the decline of crude today was tempered by the news from Kuwait,” where a strike in the oil sector have reduced by 60% the daily output to 1.1 million barrels per day, noted the analyst ClipperData of Matt Smith.

Investors had hoped the meeting in Qatar of 18 member oil producing countries and non-members of the Organization of Petroleum Exporting Countries (OPEC), reach a decision on a freeze of Production superabundant weighing on prices for almost two years.

But after six hours of negotiations, the Qatari Minister of Energy Mohammed bin Saleh al-Sada announced it had “more time” to reach an agreement. No date has been set for a new meeting.

The fall of about 60% in crude since June 2014 was caused by oversupply, following a sharp increase in the production of unconventional oil, including oil shale American and the refusal by OPEC in November 2014 to cut production.

The rivalry between Saudi Arabia with Iran

Disagreements between Iran, which announced at the last moment his absence at the meeting, and Saudi Arabia have prevented the negotiations to succeed. Saudi Arabia had made it a condition to a production freeze the participation of Iran. However, Tehran had announced in advance that he would not make the meeting. Iran did not intend to give up “its historical production quota,” affirmed the Iranian Oil Minister Bijan Namdar Zanganeh, referring to the level of production and export of the country before the sanctions international against Tehran.

According to OPEC, Iran’s production reached 3.3 million barrels per day (bpd) in March, against 2.9 million bpd in January, still below its level before the embargo (about 4 million bpd).

For experts Commerzbank, requiring the participation of Iran an agreement despite prior refusal of Tehran, “Saudi Arabia has deliberately torpedoed the agreement” which “considerably messed credibility oil producers in general and OPEC in particular. ”

Towards a balance, even without agreement?

“The disappointment of Doha is actually positive,” according to analyst Bart Melek of TD Securities, because “foul up short-term courses (production) will fall significantly this year.” US production appears indeed now under the threshold of 9 million barrels per day. The International Energy Agency predicted an acceleration in the decline of oil supply outside OPEC this year and in 2017. “Notwithstanding Doha, the market begins to rebalance,” said another analyst, Matt Smith. “The market is in the process of rebalancing, but the process will be gradual,” noted Tim Evans of his side at Citi. “Given the current level of supply and demand, we believe that oil is expected to fall to an area of ​​35-37 dollars per barrel of WTI,” said Bart Melek.