The most anticlimiatic culmination to the most farcical "agreement" of 2016, one which could have been seen a mile away by any carbon-based trader not housed in a collocated, supercooled facility in Secaucus, has taken place and here is the "shocking" result:
- OPEC, NON-OPEC MINISTERS FINISH OIL TALKS IN DOHA, NO AGREEMENT - RTRS
- OIL PRODUCERS END DOHA TALKS: OMAN MINISTER - BBG
- DOHA OIL TALKS FINISH WITHOUT FREEZE DEAL: NIGERIAN MINISTER - BBG
- OMAN MINISTER SAYS OIL PRODUCERS NEED MORE TIME TO REACH DEAL
Bloomberg has some additional details, even if the endgame had been clear for weeks in advance:
Negotiations between 16 oil producers in Doha ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.
The summit in the Qatari capital, which dragged on for more than ten hours beyond its initially scheduled conclusion, finished with no final accord, Nigeria’s Petroleum Minister Emmanuel Kachikwu told reporters. Discussions stumbled over whether the agreement should extend to other producers such as Iran, which wasn’t present, according to a person familiar with the matter. The inability to reach consensus will lead to a “severe” drop in prices, Citigroup Inc. predicted before the meeting.
“The Doha meeting was an opportunity for OPEC to polish its tarnished image,” Miswin Mahesh, an analyst at Barclays Plc in London, said on April 15. “After the failure of OPEC’s December meeting, the market was uneasy about its cohesion and Doha was a chance for the group to reassert its relevance and build a circle of trust.”
As reported earlier, and as has been reported for weeks, the failure to reach a deal was as a result of Saudi intervention, who have been the only dominant force among oil producing nations, ever since the Saudis killed OPEC as a cartel in November 2014. Here is the FT regurgitating what is already known:
Delegates said Saudi Arabia had in effect torn up an earlier draft of the deal as it decided it could not be party to an agreement that would give Iran any leeway. Tehran had refused to join the freeze as it rebuilds its oil exports after years of sanctions.
Iraq, to be sure, was quite displeased: "We are very, very disappointed," said Iraq's representative. "This will effect the price and our earnings. We wanted a deal."
But the Saudis - who are about to drink everyone's milkshake again - did not, despite so much optimism for a deal ahead of the meeting...
Of course, one has to keep the dream alive, and sure enough the strawman for more headlines is set:
- OIL-PRODUCING NATIONS WILL MEET AGAIN, PROBABLY JUNE: NIGERIA - BBG
Will it once again work to fool the idiot algos, with recurring headlines of another "imminent certain deal", which will ram the shorts for another 2 months of stop hunts? Probably. The only question is whether Venezuela's regime will survive for another two months.
What happens next? Again here is Citi's Ed Morse with the obvious next steps:
If there is no agreement, then expect a sharp oil market sell-off on Monday.
And now we begin counting down the hours until oil opens for trading, pardon, selling unless the BOJ decides it will soak up every last drop on offer.