Malcolm Graham-Wood
Independent Analyst
It seems as if the Doha meeting was doomed from well before it started although the Saudis did go along with the process up to and including signing the draft communique at lunchtime yesterday. Then, apparently piqued by Iran on a number of levels, walked away, leaving no deal possible. This was no last minute decision and to a large extent takes the Saudi/Iran face-off to a new, more disturbing plane, make no mistake the Russians wont take kindly to it either. The above prices above are about two dollars too high as markets this morning absorbed the meeting and its result.
Having said that, and aware that fundamentals should keep the price down in the short term, on a geopolitical basis the behaviour of the Kingdom is not good for anyone and ironically may serve to underpin the oil price. The Saudis will have known that this behaviour would effectively push prices down, they have put pride before that fall.
Elsewhere things have been a bit mixed but marginally positive for oil prices. The Kuwaiti service sector strike appears to be biting with some commentators suggesting that as much as 2m b/d may be affected before long. Chinese data was better than expected and the EIA announced that US production was below 9m b/d and with the rig count falling again a deal in Doha must have looked good to the bulls, right now things are a looking a tad wobbly.
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