Oil fell after output talks Sunday in Doha between the world’s biggest producers ended without an agreement to limit supplies, a diplomatic failure that sent prices lower.
Futures fell 4.6% in New York, paring an earlier loss of 6.8% — the biggest decline in two months. The summit in the Qatari capital, which dragged on for more than 10 hours beyond its scheduled conclusion, finished with no final accord. There were significant hurdles to any deal after Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said the kingdom wouldn’t restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now. A strike that reduced Kuwait’s output by 60% entered a second day.
“Doha highlights the poor state of affairs between Iran and Saudi Arabia,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “It shows the big split between Saudi Arabia and its Gulf allies on one side against Iran and Iraq. It was a bad day for the likes of Venezuela and Ecuador.”
West Texas Intermediate for May delivery fell $1.84 to $38.52 a barrel at 9:32 a.m. on the New York Mercantile Exchange. The contract touched $37.61, the lowest since April 8. Total trading volume was 92% above the 100-day average.
Brent for June settlement retreated $1.45, or 3.4%, to $41.65 a barrel on the London-based ICE Futures Europe exchange. The global benchmark was at a $1.34 premium to June WTI.
Oil ministers from 16 nations, representing about half the world’s output, gathered in a bid to stabilize the global market, the first significant attempt at coordinating oil output between the Organization of Petroleum Exporting Countries and nations outside the group in 15 years. Discussions stumbled after Saudi Arabia and other Gulf nations wouldn’t agree to any deal unless all OPEC members joined including Iran, which wasn’t present at the meeting, Russian Energy Minister Alexander Novak told reporters.
“The weekend talks are a demonstration that the Saudi government, as the deputy crown prince has clearly stated, doesn’t want to cede market share,” Ed Morse, head of global commodity research at Citigroup Inc., said by phone. “They are fearful that the world may be in a weak or bearish market for a long period of time. In a bear market, as they learned from the 1980s, if they cede market share it is very difficult to get it back.”