Freeze Speculators Hammered, Crude Oil Prices Head Due South
Crude Oil prices seeing a steep fall in early Monday morning Asian trading hours after talks ended in Doha, Qatar with no agreement on capping production, could touch 26 bbl (or lower) near term
This is an extremely Bearish scenario with the 1998 lows of 18-22 bbl as the target.
US Crude prices finished at 41.50 bbl Friday in a speculator’s rally for the production capping deal aka “freeze”, marking prices that were more than 50% higher than their low point in February.
In the Asian session: WTI is currently trading at 38.52, -1.84, Brent Crude is trading at 41.36, -1.74 Outlook Very Bearish
The Doha deal fell apart Sunday, after Saudi Arabia demanded that Iran join in, reviving industry fears that major producers are embarking again on a battle for market share, especially after Riyadh threatened to raise output steeply if no freeze deal were reached.
Iran plans to increase production after western sanctions were lifted in January.
Some 18 Crude Oil producing nations, including non-OPEC Russia, had gathered in Doha which had been in the making since February in hopes of stabilizing output at January levels until October 2016. Sunday the talks’ collapse will seriously dampen investor confidence.
The world is awash in Crude Oil demand is soft, prices will fall further.