Oil prices retract to $6 per barrel in New York
The world saw a continuous decline in the already tumultuous oil prices slide even further after OPEC officials could not come to an agreement to curb the excess supply and to convince Iran to backtrack on its oil production.
The oil prices started to slide after Bijan Namdar Zanganeh, The Iranian Oil Minister informed reporters in Vienna that Iran will not be cutting back on its oil output. A meeting that reportedly lasted for over 10 hours and focused solely on finding a solution to eradicate the oil glut and share the burden of the excess, with Iran failing to comply and committed to producing over 7 percent more than the proposed levels by Saudi Arabia. The market seemed collected on Monday after Iraq’s Oil minister said in a statement that there are likely chances of the OPEC countries to come to an agreement causing the prices to rally by about 2.2 percent. Goldman Sachs Group Inc. however, stated that the pricing was based on a 30 percent chance of a deal happening.
As per Morgan Stanley, The result of a deal between the OPEC could result in a boost of approximately $5 per barrel, however, a failure could further see the prices decline to up to $20, said the Chief Oil Analyst at Energy Aspects Ltd, Amrita Sen.
Saudi Arabia, for the first time in 8 years seemed favorable on the idea of curbing the excess oil production and resorting to optimum efficiency retracted on its stance Sunday when their Energy Minister, Khalid Al-Falih said: “producers don’t necessarily need to curb output.”
“There is some disappointment that no deal has been reached so far,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, said by e-mail. “The issues regarding Iran and Iraq remain almost the same as a few weeks ago.”
As the OPEC tries to solve its own issues and come to an agreement, the group is also reaching out to other countries and major oil producers such as Russia to curb their global supply glut by as much as 600,000 barrels per day. Russia’s refusal to do so resulted in the termination of a planned discussion of non-OPEC suppliers that was to be held on Monday.