Oil prices took a steep fall in early Monday morning Asian trading hours after talks ended in Doha, Qatar with no agreement on capping production, with one analyst predicting prices "could touch $30 a barrel within days."
"This is an extremely bearish scenario, Abhishek Deshpande, an oil analyst at Natixis told The Wall Street Journal
, before adding his prediction for $30-per-barrel oil.
U.S. crude prices finished at $41.50 a barrel on Friday, following a rally stemming from hopes for the deal, marking prices that were more than 50 percent higher than their low point in February. Before Friday, crude was trading recently at $38.05 a barrel, with Brent prices at $40.86 a barrel.
The Doha deal fell apart on 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 also plans to increase production after western sanctions were lifted in January. Some 18 oil nations, including non-OPEC Russia, had gathered for the deal, which had been in the making since February in hopes of stabilizing output at January levels until October 2016.
Deshpande said Sunday the talks' collapse will “seriously hurt investor confidence."
However, some market watchers commented that the prices will not fall back to previous lows, because production in the United States has been falling.
“You’ve got to be more confident in the market today than you were three months ago,” David Zusman, chief investment officer at Talara Capital Management, told The Wall Street Journal. "I don’t think actions of OPEC will be required to balance this market anyhow. You’ve got a combination of improved demand as well as declining supplies.”
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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