Ash: Saudi’s bring some reality back to over-hyped crude oil prices

The meeting of major crude oil producers in Doha over the weekend, called for the specific purpose of forcing crude prices higher, instead got a short, sharp shock from the real market maker, Saudi Arabia, with the Deputy Crown Prince Salman in person delivering the message that until someone gets a rope on Iran’s galloping ambitions all talks about lower production can be forgotten.

LONDON, Apr 18, 2016 (UBO) – It’s unclear what weekend action – or to be more correct lack of action – will have at local gas pumps, but Nomura International economist Timothy Ash points to the message delivered in Doha by Saudi Deputy Crown Prince Mohammed bin Salman was a wake-up call for other producers who were looking to force crude prices even higher. Ash offered the following comments at 08:24 today:

It was obvious a number of interested parties (led by Russia) had been "spinning" the market higher for months, and the market had risen on the basis of not very much aside from a low base. I think reality finally dawned with the Doha meeting that the Saudis are the key market setters for the oil price and they prefer it lower rather than higher, given their geopolitical tussle for regional supremacy with Iran. Salman's comments last week that Saudi could increase output kind of said it all.

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