Oil, Doha poised understanding saves prices. Absent Iran, Riad brakes on cuts – Il Sole 24 Ore

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This article was published April 17, 2016 at 11:28 hours.
the last change is the April 17, 2016 at 17:09 hours.

whatever the outcome, the Doha summit is already an event. Not going on for fifteen years to witness such a serious attempt at cooperation between oil producers and OPEC does not. And to sit around the table tomorrow in the Qatari capital will be about twenty countries, even 25 seconds to some sources, a number that has no precedent in history. Together they are responsible for over half the world’s oil production, which is about 80 million barrels per day (mbd).

The stakes are high. Only the possibility of an agreement to freeze the extractions on January levels was the most bullish factor for the barrel prices in recent months, managing to lift her by almost 60% from the lows of January, when for the first time since 13 years fell below $ 30 a barrel. You even arrive at a coordinated production cut is impossible, agree analysts. As well as production levels in January were the highest (and later rose further in some countries, reaching record levels in Russia and Iraq) is common opinion that a freeze will not shift the balance in the oil market:.

Yet the negotiations – with tangible signs that the production of shale oil in the US is falling – have managed to significantly improve the mood of the operators, prompting funds to move to bullish positions.

In the two months since the initial understanding between Saudi Arabia, Russia, Qatar and Venezuela, announced on February 16, Brent has appreciated by almost a third, to nearly $ 45 this week (on Friday closed at $ 43.10). And there is no doubt that diplomatic negotiations to consolidate a broader consensus on the Doha Plan have had a crucial role in driving the oil pattern, alternating moments of euphoria to other disappointment (and consequent price reductions), which peaked when Prince Mohammad bin Salman, one of the most powerful figures in Saudi Arabia, denied that Riyadh was willing to freeze production without that Iran would do the same: a position that has also insisted yesterday, adding that the country can increase output to 11.5 mbd and 12.5 immediately within 6-9 months if you just want to. “This is not my battle is the battle of others who suffer from the low prices.

<'p> As a result, Russia has tried to patch up, rekindling some hope on the possibility of an agreement. The well attended Sunday’s meeting encourages the expectation that they will end up with a hole in the water. In case of agreement, however, even more content will be important to the form of the message: to avoid a drop in crude oil prices, we must invent something to keep alive the possibility of further action in the future, perhaps to cut production.

The absences in Doha are not, however trivial. One that stands out the most is that of Iran at the last minute made it clear that will not send any rapresentante. Der Minister Bijan Zanganeh rest had repeatedly stated that he had no plans to cap production: only the idea to ask, now that Tehran has been freed from the yoke of international sanctions, is “ridiculous,” he said in February . Of the 13 members of the Organization of crude exporters will also Libya, torn by civil war and with a reduced production of crude oil less than 400 thousand barrels per day, a quarter of its potential.

Even in the ranks of non-OPEC producers are absences that weigh: Norway and Mexico, for example, that in the past had cut production along with OPEC, this time will not be the game. The first will not send any representative, the second – that is trying foreign partners to lift the oil industry in crisis – will go only as an observer. According to reports gathered by Reuters, the Mexican Minister of Finance and the CEO of the state-owned company Pemex in the same hours will indeed travel to New York, where they planned a series of meetings with potential investors.

In Doha also miss – but the fact is not surprising – the United States, that rival Russia and Saudi Arabia on the top position of the world’s oil producers. Miss Canada. And will China, which with over 4.5 million barrels per day is in fourth place among the big oil, although final consumption.

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