Monday, 18 April 2016

No oil production freeze agreement after talks break down in Qatar

No Deal: Doha Talks End Without Agreement

Nigerian Oil Minister Emmanuel Ibe Kachikwu arrives to a meeting between OPEC and non-OPEC oil producers, in Doha, Qatar April 17, 2016. © Ibraheem Al Omari
17 April, 2016

The most anticlimiatic culmination to the most farcical "agreement" of 2016, one which could have been seen a mile away by any carbon-based trader not housed in a collocated, supercooled facility in Secaucus, has taken place and here is the "shocking" result:
Bloomberg has some additional details, even if the endgame had been clear for weeks in advance:

Negotiations between 16 oil producers in Doha ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.
The summit in the Qatari capital, which dragged on for more than ten hours beyond its initially scheduled conclusion, finished with no final accord, Nigeria’s Petroleum Minister Emmanuel Kachikwu told reporters. Discussions stumbled over whether the agreement should extend to other producers such as Iran, which wasn’t present, according to a person familiar with the matter. The inability to reach consensus will lead to a “severe” drop in prices, Citigroup Inc. predicted before the meeting.
The Doha meeting was an opportunity for OPEC to polish its tarnished image,” Miswin Mahesh, an analyst at Barclays Plc in London, said on April 15. “After the failure of OPEC’s December meeting, the market was uneasy about its cohesion and Doha was a chance for the group to reassert its relevance and build a circle of trust.”

As reported earlier, and as has been reported for weeks, the failure to reach a deal was as a result of Saudi intervention, who have been the only dominant force among oil producing nations, ever since the Saudis killed OPEC as a cartel in November 2014. Here is the FT regurgitating what is already known:

Delegates said Saudi Arabia had in effect torn up an earlier draft of the deal as it decided it could not be party to an agreement that would give Iran any leeway. Tehran had refused to join the freeze as it rebuilds its oil exports after years of sanctions.

Iraq, to be sure, was quite displeased: "We are very, very disappointed," said Iraq's representative. "This will effect the price and our earnings. We wanted a deal."

But the Saudis - who are about to drink everyone's milkshake again - did not, despite so much optimism for a deal ahead of the meeting...

Of course, one has to keep the dream alive, and sure enough the strawman for more headlines is set:
Will it once again work to fool the idiot algos, with recurring headlines of another "imminent certain deal", which will ram the shorts for another 2 months of stop hunts? Probably. The only question is whether Venezuela's regime will survive for another two months.

What happens next? Again here is Citi's Ed Morse with the obvious next steps:

If there is no agreement, then expect a sharp oil market sell-off on Monday.

And now we begin counting down the hours until oil opens for trading, pardon, selling unless the BOJ decides it will soak up every last drop on offer.

From RT

No oil production freeze agreement after talks break down in Qatar

Despite crisis talks in Qatari capital Doha stretching late into the late, OPEC and non-OPEC oil producers have failed to agree on a cap that would prop up oil prices, which have been collapsing over the past year.

At the final press conference on Sunday evening, Qatar's energy and industry minister, Mohammed bin Saleh al-Sada, said countries at the talks would “need more time” for consultations, before attempting to make a deal, likely at the next scheduled talks in June.

Sources told Reuters that members of the Middle East-dominated OPEC plan to negotiate among themselves, before presenting a more united position to those outside the group.

The 18 countries that gathered in Doha, which included Russia and Saudi Arabia, represent nearly three quarters of the world’s oil output. According to a leaked draft of a final agreement, the signees would agree to cap production at January 2016 levels.

But the talks hit a last minute hitch, when Saudi Arabia demanded that regional rival Iran also freeze its own output. Iran, which had planned to send a delegation to the meeting, before pulling out at the last moment, says it has no intentions of curtailing production, after suffering years of recently-lifted EU and US nuclear sanctions.

Russia ‘disappointed’ by Qatar oil talks after ‘last-minute demands’ from Gulf states

Qatar's Minister of Energy and Industry Mohammed Saleh al-Sada (C), Saudi Arabia's minister of Oil and Mineral Resources Ali al-Naimi (C-L), Venezuela's minister of petroleum and mining Eulogio Del Pino (L), and Russia's Energy Minister Alexander Novak (C-R). © Olya Morvan
Qatar's Minister of Energy and Industry Mohammed Saleh al-Sada (C), Saudi Arabia's minister of Oil and Mineral Resources Ali al-Naimi (C-L), Venezuela's minister of petroleum and mining Eulogio Del Pino (L), and Russia's Energy Minister Alexander Novak (C-R). © Olya Morvan / AFP

Alexander Novak, Russia’s energy minister, blamed OPEC states for “undoing two months of negotiations” by presenting demands on the morning of oil production freeze talks in Doha, which ended with no deal having been reached.
Speaking to Russian media following the conclusion of the discussions, which lasted over 12 hours, Novak explained that the 11 OPEC states, and seven outsiders present in the Qatari capital had spent two months drafting an agreement that would cap oil production at January levels, to avoid a further price collapse.
"Some OPEC countries decided to change their terms at the last moment, trying to get concessions from countries that are not here. We were insisting on trying to concentrate on the countries which are," said the official.

Saudi Stocks Slide Most In 3 Weeks As Post-Doha Hanover Begins

Early on Sunday it appeared that producers were close to agreeing an oil output freeze, but negotiations were later delayed into the afternoon as a new proposal called for all OPEC members to agree even though Iran has said it will not take part.
"Investors interpreted the delay to possibly mean a lack of a solid deal," said a Jeddah-based trader, adding that investors would prefer to wait until an agreement was reached.

We look forward to the chaos that the machines have in store when crude futures re-open

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