Brent $40.58, down $2.52
WTI $38.41 down $1.95.
From Reuters:
It was the worst possible outcome for oil producers at their weekend meeting in Doha, with their failure to reach even a weak agreement showing very publicly their divisions and inability to act in their own interests.
Expectations for the meeting had been modest at best, with sources in the producer group predicting an agreement to freeze output. But even this meagre hope was dashed by Saudi Arabia's insistence Iran join any deal, something the newly sanctions-free Islamic republic wouldn't countenance.
From a producer point of view, an agreement including Iran that shifted market perceptions on the amount of oil supply available would have been the best outcome.
The acceptable result would have been an agreement that froze production at already near record levels, with an accord that Iran would join in once it had reached its pre-sanctions level of exports.
What was delivered instead was confirmation that the Saudis are prepared to take more pain in order not to deliver their regional rivals Iran any windfall gains from higher prices and exports.
The meeting in Qatar on Sunday effectively pushed a reset button on the crude markets, putting the situation back to where the market was before hopes of producer discipline were first raised.
What happens now is that the market will have to continue along its previous path of re-balancing, without any assistance from the Organization of the Petroleum Exporting Countries (OPEC) or erstwhile ally Russia.
Brent crude fell nearly 7 percent in early trade in Asia on Monday, before partly recovering to be down around 4 percent.
The potential is for crude to fall further in coming sessions as long positions built up in the expectation of some sort of producer agreement are liquidated in the face of the reality of no deal.
It's likely that recriminations will follow for some time among the oil producers, with the Russians and Venezuelans said to be annoyed at what they see as the Saudi scuppering of a deal that had almost been locked in.The market came into the meeting ridiculously long, this is going to take a while to work off:
FUTURE DEAL UNDERMINED
This will make it harder for any future agreement, with the OPEC meeting on June 2 the next chance for the grouping to reach some sort of agreement....MORE
