- The collapse in crude oil prices after the Doha deadlock fizzled out, and instead oil showed its resilience, as U.S. crude settled at $39.78/bbl, -1.4% but paring losses of as much as 6.8% in trading as low as $37.61, and Brent finished just -0.4% at $42.91 after a $40.10 low.
- Perhaps the reaction should not be a surprise, since even if an agreement had been reached in Doha it would not have significantly reduced global supplies, just frozen them at high,and in some cases record levels, Financial Times writes.
- Other factors mitigating oil losses were an oil workers’ strike in Kuwait that has temporarily reduced output and a growing acceptance among investors that the global market is creaking into alignment.
- But some analysts say the deadlock in Doha cannot be simply be ignored because it raises the risk of a damaging price war, with Iran refusing to cap output following years of western sanctions while Saudi Arabia does not want to yield market share to rivals.
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