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Oil producers fail to agree on output limits

Prices tumble on Asian markets as Iran's refusal to be part of an agreement provided a breaking point.

Nevil Gibson
Mon, 18 Apr 2016

A crucial meeting of oil producers in Doha, Qatar, has failed to agree on output limits, meaning efforts to push up crude prices have failed.

Oil ministers from a dozen countries leaving the meeting late on Sunday told reporters a deal had failed.

Oil prices had risen in the past few weeks ahead of the meeting, which included representatives from Russia and Saudi Arabia, the world’s two biggest producers, and most Opec members.

In early Asian trading today, prices have tumbled. US crude plunged 6.7% to $US37.70 a barrel while Brent was down 6.9% at $US40.14.

On Friday, prices slid the most in nearly two weeks on doubts the meeting would have any outcome. For the week, the contract ended up 1.6% for its eighth winning week in the last nine.

Brent, the global benchmark, settled down 74USc, or 1.7%, at $US43.10 a barrel. It also ended the week higher by 2.8%.

Both benchmarks had risen overnight but dropped after news that Iran’s oil minister, Bijan Zanganeh, wouldn't attend the meeting.

Iran is gearing up production as sanctions are removed and Saudi Arabia is known to have insisted any agreement had to include Iran.

The latest price drops will have implications for sharemarkets, as the two have been tracking each other.

It was unclear if oil officials will try to reconvene again. But officials who left the meeting – including Ecuador’s oil minister – said a deal wasn’t reached.

Azerbaijan’s oil minister said he hadn’t been made aware of any follow-up meeting.

Qatar's oil minister said further consultation was required with non-Opec members. 

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Nevil Gibson
Mon, 18 Apr 2016
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Oil producers fail to agree on output limits