Asia stocks mixed post US-China talks    Egypt, Pakistan discuss boosting maritime cooperation in Suez Canal visit    EU economic sentiment improves in July '25    PM: Sisi's Gaza speech reaffirms Cairo's steadfast stance on Palestinian cause    Egypt, France airdrop aid to Gaza amid growing humanitarian crisis, global criticism of Israel    Egypt launches initiative with traders, manufacturers to reduce prices of essential goods    SCZONE chief discusses strengthening maritime, logistics cooperation with Panama    Supply minister discusses strengthening cooperation with ITFC    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Egypt reviews health insurance funding mechanism to ensure long-term sustainability    Gaza on verge of famine as war escalates, ceasefire talks stall    Gaza crisis, trade on agenda as Trump hosts Starmer in Scotland    Egyptian president follows up on initiatives to counter extremist thought    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    Egypt will keep pushing for Gaza peace, aid: PM    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Egypt, Senegal sign pharma MoU to unify regulatory standards    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Morgan Stanley throws cold water on hints of any OPEC freeze deal
Published in Amwal Al Ghad on 23 - 08 - 2016

Energy investors got all excited last week on hints of a freeze deal among major oil producers, but anyone hoping for coordinated action to boost the struggling oil market is bound for disappointment, said Morgan Stanley.
In a note out on Monday, strategists led by head of energy commodity research Adam Longson warned that an output agreement between members of the Organization of the Petroleum Exporting Countries remains "highly unlikely" as the cartel members battle for market share.
"The market treats OPEC as the central banker of oil where simple jawboning can move markets and scare off shorts," they said in the note.
"However, we see too many headwinds and logistical challenges to a meaningful deal given past statements by OPEC and its members."
Last week, crude oil US:CLU6 logged its best week in more than five months as traders held onto expectations OPEC members will agree on a production cap at its informal meeting at the International Energy Forum in Algeria next month.
Hopes of such a deal were spurred after OPEC kingpin Saudi Arabia hinted it would stop the price slump, with oil minister Khalid Al-Falih saying his country was ready to "take any action to help the market rebalance" if necessary. The minister stressed that any move would have to be in cooperation with OPEC and non-OPEC producers.
But according to the Morgan Stanley strategists, the market may have gotten prematurely excited and misinterpreted the Saudi comments.
"This is the same talking point the kingdom has been using for some time. It neither acknowledges the need for action, nor firmly commits Saudi Arabia to participate if certain parameters are met," they said.
"It is unlikely Riyadh will take any freeze negotiation seriously as officials believe the market share policy is slowly, but surely working," they added.
The idea of a production freeze was also pitched earlier in the year, but was quashed at a highly anticipated meeting in Doha, Qatar, in April when Iran refused to get onboard with the plan. The Middle East nation was in the midst of ramping up production and exports after international sanctions were lifted in January following a nuclear deal with the U.S.
However, even if the cartel — against Morgan Stanley's expectations — is successful in sealing a deal this time, it won't provide much of a boost for oil prices, the bank said.
"OPEC supply is currently at record levels, spurred by both seasonal increases in domestic demand and members' current market share maximization policies," the strategists said.
"With more than a month until the International Energy Forum in Algeria, markets may lose interest in prognosticating a deal. However, as the meeting approaches, it would not be surprising if market chatter and volatility increased," they added.
Oil prices slumped around 3% on Monday and continued lower on Tuesday, with crude down 0.6% at $47.12 a barrel and Brent LCOV6, -0.92% off 0.3% at $48.99 a barrel.
Source: MarketWatch


Clic here to read the story from its source.