16 Feb 2016
Oil trims gains as Iran remains a roadblock in production freeze strategy
Oil prices trimmed gains after a meeting between major producers (excluding Iran and Iraq) ended with consensus on production freeze, but markets believe Iran is likely to reject the idea.
Both benchmarks – WTI and Brent are now up just 2% on the day. A while ago, prices were up almost 6% on speculation the major producers would consider cutting production.
Qatar Energy Minister and Saudi Oil Minister both confirmed freezing production at January levels. However, the agreement is contingent on other producers taking the same course of action.
That means Iran could single handedly put an end to production cut/production freeze talks, given the nation intends to recapture the lost market share.
Consequently, WTI fell from its daily high of USD 31.51 to trade around USD 30.10/barrel. Meanwhile, Brent fell from USD 35.52 to trade around USD 34.10/barrel.
Both benchmarks – WTI and Brent are now up just 2% on the day. A while ago, prices were up almost 6% on speculation the major producers would consider cutting production.
Qatar Energy Minister and Saudi Oil Minister both confirmed freezing production at January levels. However, the agreement is contingent on other producers taking the same course of action.
That means Iran could single handedly put an end to production cut/production freeze talks, given the nation intends to recapture the lost market share.
Consequently, WTI fell from its daily high of USD 31.51 to trade around USD 30.10/barrel. Meanwhile, Brent fell from USD 35.52 to trade around USD 34.10/barrel.