News this past week
- Doha oil meeting disappoints
- European equities have a strong week
- Italian bank bailout fund announced
- US PPI inflation negative
- Improving data out of China
James Klempster of Momentum Global Investment Management, CFA shares his view:
Following today’s substantial sell off in crude oil prices, seemingly the only certainty of the oil market at the moment is volatility. While there is downward pressure on the price of oil today, this comes on the back of a reasonable rebound following January’s lows. Today’s sell off is a result of the weekend’s oil producers’ meeting in Doha which resulted in disappointment for oil bulls. Although the meeting was not a formal Organization of the Petroleum Exporting Countries (OPEC) occasion, most OPEC members were present and as a result it had been signposted as an opportunity for the Organisation to curb their collective output so as to support a higher oil price. In the end, Saudi Arabia refused to accept the proposals because not all members of OPEC were willing to agree; the most notable being Iran. In fact Iran failed to attend the meeting. Saudi Arabia, the world’s largest oil producer, had been prepared to freeze output at January levels if all OPEC members had agreed, but Iran looks set to continue to increase output following the lifting of export sanctions.