Global shares are under pressure on Wednesday and crude oil prices are falling after comments yesterday from 2 different oil ministers from Saudi Arabia and Iran that indicate a lack of cohesion about how to handle oil production.
Brent Crude (May 16) futures are down -1.88 percent to $33.32 a barrel while U.S. NYMEX (April 16) futures are down -3.04 percent to $30.87.
Last week crude oil prices rallied after a freeze proposal from OPEC nations Saudi Arabia, Qatar, and Venezuela and non-OPEC nation Russia appeared to gain widespread support.
Although Iranian Oil Minister Bijan Namdar Zanganeh said during a meeting on February 17th that Iran supports a proposed oil freeze among oil producer nations to maintain prices, he changed his tune yesterday and said that the oil production freeze was a “very funny joke” according to ISNA news agency.
“Some neighboring countries have increased their production over the years to 10 million barrels per day and export this amount, then say let’s all freeze oil production,” Zanganeh said.
“They freeze production at 10 million bpd and we freeze at one million bpd. This is a very funny joke” Zanganeh added.
Yesterday Saudi Arabian Oil Minister Ali al-Naimi made it clear that oil production cuts would not be occurring but admitted that more OPEC nations would be in favor of freezing crude oil production at January levels.
OPEC and non-OPEC members that support a production freeze will be meeting in March.
U.S. Economic Calendar
Later this morning, new home sales (10:00 a.m.) for January and crude oil inventories (10:30 a.m.) for 2/20/16 will be reported.
Tomorrow durable orders for January and jobless claims will come into focus.
On Friday the 2nd estimate of Q4 2015 will be reported along with inflation (PCE) for January, the Fed’s preferred inflation gauge.