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Doha talks fail to reach agreement, oil tumbles
Posted On 18 Apr 2016
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The stalemate in the Doha talks over the weekend resulted in oil price and commodity-linked currencies to tumble at the open of trading on Monday.
Talks between major producers to freeze oil output ended without a deal on Sunday night, after Saudi Arabia insisted Iran should be part of any agreement.
Brent crude oil, the international benchmark, lost 4.1 per cent to trade at $41.34 a barrel, while WTI oil, the US benchmark, was down over 4 per cent lower at $38.49.
The safe haven yen benefited from the unsettled markets and was 0.8 per cent stronger at Y107.88 per dollar. Also, gold, another safe haven asset, rose 0.1 per cent to $1,235.71 an ounce.
Energy stock s were affected in Asian trading on Monday. In Japan, the broad Topix index’s energy sector was down by 3.3 per cent. Australia’s energy sector was down 2.7 per cent. The Australian dollar was 0.8 per cent lower at $0.7660, but had shed as much as 1.7 per cent in early trading.
Oil prices had rallied strongly last week on hopes of a deal this Sunday. Prices rose from below $30 a barrel in mid-January to $43 a barrel last week.
The meeting in Doha was led by Qatar, Russia and Saudi Arabia and the talks were aimed at achieving the first global oil deal in 15 years. However,
Iran was the sticking point and was not willing to cap oil production after just recently having Western sanctions lifted. Saudi Arabia was not willing to compromise on a deal .
Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said his country would not limit its oil production without commitments from other major producers including Iran, which has ruled out freezing output for now.
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