Research Team at Deutsche Bank, suggests that the latest twist in the Oil saga yesterday came about as headlines out of both Saudi Arabia and Iran hit the wires.
Key Quotes
“The former’s Oil Minister, Ali al-Naimi, did initially say that freezing output at current levels is the beginning of a process and that high inventory levels will probably decline in due time if we can get all the major producers to agree to not add additional barrels. It was a follow up to this comment which appeared to spook the market however, with al-Naimi warning that ‘this is not the same as cutting production’ and that ‘that’s not going to happen’, while also suggesting that ‘there is less trust then normal’ between nations.
Chatter from Iran’s Oil Minister Zanganeh didn’t help, saying that the Saudi-Russia freeze plan is ‘ridiculous’ and that the proposal puts ‘unrealistic demands’ on Iran. ConocoPhillips CEO seemingly summed up the confidence at a corporate level, saying that Oil companies ‘have to prepare for the worst case’ and that you ‘can’t count on a Saudi freeze working’.”
