Disagreement in Doha!
The world’s 15 largest oil-producing nations, representing 60% of global production, met in Doha over the weekend, but announced that they were unable to reach an agreement on a 6-month production freeze at January levels. Although expectations had been relatively low, recent joint announcements by Saudi Arabia and Russia had revived hopes.
The main stumbling block was Iran, which ended up not coming to Qatar, indicating that it refused to take part in any production freeze.
Iran is showing its determination to continue to take advantage of the recent lifting of sanctions by regularly increasing its output.
In a statement intended to reassure markets, Qatar indicated that more time was needed to reach an agreement and talks are already underway for another meeting in June.
The reaction in crude oil prices was immediate, with WTI diving to $38 and the USD/CAD pair rising 200 points. Profit-taking is underway just prior to North American markets opening.
USD sellers should get ready if we head back into the 1.3000 to 1.3400 range.
