Oil tumbled by the most in two months after output talks on Sunday between the world's biggest producers ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.
Futures fell as much as 6.8% in New York, the biggest intraday drop since Feb 1. The summit in the Qatari capital, which dragged on for more than 10 hours beyond its initially scheduled conclusion, finished with no final accord.
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 market has been so heavily positioned for a deal to go through," Angus Nicholson, an analyst at IG Ltd in Melbourne, said by phone. "The change of tone from the Saudis, particularly driven over the last few weeks by Deputy Crown Prince Mohammed bin Salman, has been quite a surprise to the market."
West Texas Intermediate for May delivery lost as much as US$2.75 to US$37.61 a barrel on the New York Mercantile Exchange and was at US$38.03 at 6:54 am Hong Kong time. The contract fell US$1.14, or 2.8%, to US$40.36 on Friday, the biggest decline in almost two weeks.
Oil ministers from 16 nations, representing about half the world's output, gathered in the Qatari capital 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. There were significant hurdles to any deal after Saudi Arabia's Deputy Crown Prince said the kingdom wouldn't restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now.
Forty traders and analysts surveyed by Bloomberg last week were evenly split on whether a consensus would be reached, and tensions were visible throughout the negotiations. While analysts doubted that any accord would have a significant impact on the global oil surplus, the group's inability to agree undermines any prospect of coordinated action to solve the market slump.
Russia was surprised there wasn't an agreement, said Novak. Officials from Saudi Arabia, Qatar, Venezuela and Russia - who initiated the push for a freeze in February - agreed to a draft accord on Saturday, but some countries changed their position right before the summit the following day, leading to "hot discussions," he said.
A freeze could have sped up the rebalancing of the market by six months, which may now take until mid-2017, Novak said in a press conference after the talks. The "door is not closed" to a future accord, although "Russia won't be as optimistic as before," he said.
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Futures fell as much as 6.8% in New York, the biggest intraday drop since Feb 1. The summit in the Qatari capital, which dragged on for more than 10 hours beyond its initially scheduled conclusion, finished with no final accord.
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 market has been so heavily positioned for a deal to go through," Angus Nicholson, an analyst at IG Ltd in Melbourne, said by phone. "The change of tone from the Saudis, particularly driven over the last few weeks by Deputy Crown Prince Mohammed bin Salman, has been quite a surprise to the market."
West Texas Intermediate for May delivery lost as much as US$2.75 to US$37.61 a barrel on the New York Mercantile Exchange and was at US$38.03 at 6:54 am Hong Kong time. The contract fell US$1.14, or 2.8%, to US$40.36 on Friday, the biggest decline in almost two weeks.
Oil ministers from 16 nations, representing about half the world's output, gathered in the Qatari capital 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. There were significant hurdles to any deal after Saudi Arabia's Deputy Crown Prince said the kingdom wouldn't restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now.
Forty traders and analysts surveyed by Bloomberg last week were evenly split on whether a consensus would be reached, and tensions were visible throughout the negotiations. While analysts doubted that any accord would have a significant impact on the global oil surplus, the group's inability to agree undermines any prospect of coordinated action to solve the market slump.
Russia was surprised there wasn't an agreement, said Novak. Officials from Saudi Arabia, Qatar, Venezuela and Russia - who initiated the push for a freeze in February - agreed to a draft accord on Saturday, but some countries changed their position right before the summit the following day, leading to "hot discussions," he said.
A freeze could have sped up the rebalancing of the market by six months, which may now take until mid-2017, Novak said in a press conference after the talks. The "door is not closed" to a future accord, although "Russia won't be as optimistic as before," he said.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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