Market - - Nov 30,2016
The oil prices have dipped by a significant 1 percent mark, making it extremely doubtful if the major producers would agree to slash output.
A fall of 3 percent was experienced on Friday, which is now backed up by a 1 percent drop on Monday.
OPEC had already planned a meeting on Monday for discussions related to production cut, but the disagreement between OPEC and non-OPEC exporter, Russia, led to the price fall out on Friday. Whereas, the current price slump is due to the exit of Saudi Arabia from attending the scheduled meeting.
Energy minister of Saudi Arabia, Khalid al-Falih, commented on Sunday regarding the rejection from the meeting. He said, OPEC hasn’t yet agreed to any conclusion which is the main reason for the back-out. The minister also justified the current output levels by announcing that, the oil market would reach a stable state on its own by 2017.
Russia’s conflict emerged over which areas or states should reduce crude oil outputs so as to curb the global production menace. OPEC has rescheduled its meet on Wednesday that will take place in Vienna. It is expected that, non-OPEC members like Russia and Azerbaijan will be present for framing plans.
“Oil prices have fallen considerably on worries about the deal. That would pressure energy shares, and could hit the entire stock markets." as said by a senior strategist at Sumitomo Mitsui Asset Management, Masahiro Ichikawa.
This slip in oil price has disturbed the status of dollar in the market. It sank by more than 1.5 percent in comparison with yen to 111.50 yen JPY=, which is down strongly from its eight-month high mark. The dollar has also scrapped more than 0.5 percent against several market currencies such as the South African rand, Mexico peso and Turkish lira.