Most Popular
-
1
Who's lying? Hybe vs. Min conflict continues to intensify
-
2
Seoul should engage Kim Jong-un’s elites for change, ex-North Korean diplomat says
-
3
Thousands rally in Seoul to call for Yoon resignation
-
4
Most teen sex offenders get away with slap on wrist
-
5
Ex-Trump official calls for S. Korea to raise defense spending to 3 or 3.5% of GDP
-
6
Man sentenced to 1 year, 8 months for stealing from elementary school classrooms
-
7
FM champions multilateralism, stresses S. Korea's vision as 'global pivotal state'
-
8
Same-sex couple denied insurance clearance despite landmark ruling
-
9
Panmunjom tours for select Korean nationals may resume in October
-
10
Young Poong says no better offer for Korea Zinc
The oil market late Monday recouped heavy losses spurred by the failure of major crude producers to agree curbs on output that could have firmed up the market.
Analysts said a strike that knocked out more than 60 percent of Kuwait's production helped support the market.
Crude prices fell nearly seven percent early in the day after producers came away from talks in the Qatari capital of Doha on Sunday empty-handed.
But by the end of trade, US benchmark West Texas Intermediate for delivery in May had largely recovered, losing 58 cents (1.4 percent) at $39.78 a barrel on the New York Mercantile Exchange.
In London, Brent crude for June delivery, the international benchmark, dipped just 19 cents (0.4 percent) to $42.91 a barrel.
OPEC kingpin Saudi Arabia insisted Sunday it would not agree to freeze production without the participation of fellow cartel member Iran -- which boycotted the talks.
Prices had rebounded last week on hopes that OPEC and non-OPEC producers such as Russia would agree to freeze output levels.
"An agreement on production caps, which had still seemed possible the day before, collapsed because of Saudi Arabia, which demanded that all oil producers -- that is to say including Iran -- should be included," Commerzbank analysts said in a client note.
"Saudi Arabia intentionally torpedoed the agreement and was willing to accept its failure. This has severely damaged the credibility of oil producers in general and of OPEC in particular," Commerzbank said.
Oil production plunged more than 60 percent to 1.1 million barrels per day on Sunday, the first day of the strike. Smith noted that Kuwaiti crude is shipped primarily to South Korea, China and India.
Oversupply to continue
Still, the failure of the Doha talks points to a continuation of the market glut. Rising production and slower global growth, particularly in China, the world's largest energy consumer, helped to push crude prices from above $100 in mid-2014 to 13-year lows of around $27 in February.
Until now the members of the Organization of the Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, refused to cut output.
The Saudi-backed stance has aimed at pushing the market lower drive out less-competitive players, including US shale producers, while maintaining their own market share.
But, although it has fallen about six percent, US production remains high.
The result though is that major exporters from Nigeria to Venezuela to Canada, and including Saudi Arabia, have suffered billions of dollars in lost revenue as prices have collapsed.
Saudi-Iran rivalry
"The much-awaited meeting exposed the political rift between Saudi Arabia and Iran, and (this) ultimately doomed the agreement," said Barclays oil analyst Miswin Mahesh in a research note.
Iran -- which only recently returned to world oil markets after the lifting of nuclear-linked sanctions by the United States and other major powers in January -- has ruled out capping its own production and says it want to boost output to pre-sanction levels.
"While there are a number of factors that might curb oil supply in the short-term -- including a strike in Kuwait and the earthquake in Ecuador -- OPEC's main problem is the relationship between Saudi Arabia and Iran and this problem is not going to go away," Rebecca O'Keeffe, head of investment at online broker Interactive Investor, told AFP.
"Indeed, Saudi Arabia may move to increase supply in response to higher Iranian output in an effort to maintain their market share," she said. "This impasse could see a sustained medium-term depression in oil prices." (AFP)
![[Eye Interview] Classic womenswear master rethinks skills gap, creativity](http://res.heraldm.com/phpwas/restmb_idxmake.php?idx=652&simg=/content/image/2024/09/26/20240926050835_0.jpg&u=)
