Dubai: Crude oil prices, which fell more than 4 per cent on Friday, are likely to extend a sell-off this week as uncertainty remains over the outcome of the Doha meeting on April 17.
Opec and Non-Opec members are scheduled to meet in Doha to discuss a possible freeze on output even as some of the oil producers are pumping record levels of oil. Iran said it will not freeze production until its crude exports return to pre-sanction levels. However, Saudi Arabia said an Iranian freeze would be necessary before any deal can be reached on April 17.
Following similar remarks on Friday, Brent crude fell 4.12 per cent to end at $38.67 per barrel, while Nymex WTI ended 4.04 per cent lower at $36.79 per barrel after Saudi Arabia, the world’s biggest exporter of crude oil, said that the kingdom will only freeze production of Iran and others follow suit.
“It is a matter of serious concern, the Saudis do not want to end up on the wrong side of this battle. Iran is determined to bring back its economy to strength and one way of doing this for them is to increase their oil production. Saudi Arabia knows that any cut in their production will be met by Iran,” Naeem Aslam, chief market analyst with AVA Trade told Gulf News.
“This has changed the fundamental story all together. Hence, we have seen this sell off for the oil price. We do envisage that this could continue this week unless we have some sort assuring news which can support the fundamentals,” Aslam said, adding “we believe the trend could be skewed towards the downside as fundamentals have changed. The next support is at $34 and a break of this will open the floor towards the $30 mark.”
Since March, oil has risen 14 per cent as it rebounded from a 12-year low on speculation that global glut will ease as US output falls.
