WTI Crude Plunges To $31 Handle As Production Cut Gains Entirely Erased
Tyler Durden: Denials, Goldman’s dismissal, and now Persian Gulf oil producers unsupportive, and Thursday’s exuberance is done…
You didn’t really think it was that easy right?
As WSJ reports,
Persian Gulf Arab oil producers don’t support holding an emergency meeting of the Organization of the Petroleum Exporting Countries, officials said, dampening expectations that the group will act to prop up sagging crude prices.
Persian Gulf Arab OPEC delegates said they want to wait until the next scheduled OPEC meeting in June, when they will have a clearer picture of how new barrels of Iranian oil are affecting the market now that western sanctions have ended. Iran has pledged to increase production by a million barrels a day this year, potentially flooding a market that already has too much supply.
“We still don’t how much oil Iran can add to the market and this won’t be clear for weeks if not months so calling for an emergency meeting is pointless,” a Gulf OPEC delegate said.
The Persian Gulf Arab states include Saudi Arabia, Kuwait, Qatar and the United Arab Emirates, an influential bloc that is leading OPEC’s current policy of letting the market sort itself out.
The comments come as Venezuelan energy minister Eulogio Del Pino conducts a tour of oil-producing countries such as Russia and Saudi Arabia to drum up support for a coordinated output cut in hopes of lifting prices. OPEC’s inaction has helped oil prices fall to levels not seen in more than a decade, hitting $27 a barrel last month.
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A third OPEC delegate said Gulf Arab delegates see little upside to an emergency meeting and a production cut. ”If we meet in the next few weeks for an emergency meeting and we cut, we are potentially subsidizing shale production,” a third Gulf Arab OPEC delegate said, holding the often-stated view that American shale producers can ramp output up or down faster than conventional oil producers.
But what is most notable is the ever louder war of words between Iran and the Saudis: