Reading the news about OPEC’s members reactions to Algeria’s meeting makes you feel it is still April 2016, but looking at the calendar tells you it is not. The date is different, but OPEC members reactions to the oil output freeze talk are just the same to what happened prior to Doha’s meeting.
Giving empty promises and spreading hopes about an output freeze talk only to prevent oil prices from a sharp fall below $40/bbl. And when the time gets closer to the meeting date, they are all good at finding excuses.
In the last few weeks, Saudi Arabia and other OPEC members raised expectations of a coordinated action to freeze oil output. But few days ago, the Saudis said that for such an action to take place, Iran has to has to join in freezing its oil output. An offer which Iran rejected in a similar way like how it did during Doha’s meeting.
Both OPEC members’ officials have shown a positive support to the oil output freeze talk in the last few weeks, but as the meeting got closer, they changed their minds.
What to expect from Algeria’s Meeting?
1- No output freeze deal will be reached. In fact, the meeting is not a decision-making rather an informal one.
2- OPEC members will continue giving the oil market hope by signaling a possible output freeze deal during their next meeting.
3- OPEC members will continue to lose their credibility as they continue to disappoint the oil market by spreading hopes which do not last longer.
4- Oil prices could touch new lows following the negative comments by OPEC members about their unwillingness to cooperate in freezing their oil output.
