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What Is The Oil Market Expecting From Global Producers Meeting? Not Much

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What Is The Oil Market Expecting From Global Producers Meeting? Not Much

Oil prices are down sharply again on Friday ahead of this weekend’s highly anticipated global producers meeting in Qatar. The purpose of the meeting is to discuss a potential production freeze among OPEC and non-OPEC global producers, but the market seems to have low expectations.

One key point of contention at the meeting will likely be Iran, which has pledged to move forward with its goal to begin building its crude oil production back to pre-sanction levels. And output freeze deal between OPEC and non-OPEC producers will likely not include Iran.

“While there will likely be little effect on the physical market an agreement would represent an important psychological shift in setting oil prices,” Jefferies says.

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Barclays shares Jefferies’ low expectations.

“The Doha meeting does not materially change the oil market balances,” Barclays predicts.

Maintaining current production levels does little to help eliminate the massive glut of crude oil in the global market that caused the price collapse in the first place.

With both Iraq and Iran reportedly still planning on upping production in 2016, it’s unlikely that the meeting will even result in a true freeze in global production.

Shares of the United States Oil Fund LP (ETF) (NYSE: USO) are down more than 3.0 percent in early Friday trading.

Disclosure: the author holds no position in the stocks mentioned.

Posted-In: Analyst Color News Specialty ETFs Commodities Events Markets Analyst Ratings ETFs Best of Benzinga

 

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