BAGHDAD: With markets rattled and oil prices tanking after being bombarded on a variety of fronts, OPEC has attempted to bring some calm to the market regarding its optimism that it will be able to reach some kind of a deal. But will the market buy it?
Oil prices this week took a tumble on the back of several pieces of bearish news, including Iraq’s and Iran’s publicly shared resistance to any deal, an unfavorable API report that said the U.S. saw a build of 9.3 million barrels of crude, and then the death blow, with the EIA on Wednesday reporting a 14.4 million barrel inventory build. For perspective, we’ve not seen a build of that size in over three decades. We all know this excess inventory isn’t just going to evaporate overnight. And the facts are that OPEC and Russia are producing oil and record levels, all the while holding meeting after meeting to discuss the prospect of “stabilizing the market”.
This week, at least, with three punches to the gut, the market’s hope is waning, and analysts are growing increasingly skeptical that a deal will ever be reached and are doubtful that the global glut will diminish anytime soon. Accordingly, crude oil prices are down about 8 percent this week alone—a drop that probably has many an oil-dependent nation shaking in their boots.
