Petchem giants post disappointing results amid debate on oil output-cut
The recent debate about a possible supply cut coordinated by Russia and OPEC and the speculation that Saudi Arabia may give a green light to the plan pulled crude oil prices higher to $33-34/bbl late last week. However, this upturn was short-lived as plans for a production cut have faded this week. According to Goldman Sachs, such a move was highly unlikely and it would not help OPEC members as stronger prices would bring previously shut wells in the US back to the market.
Supply concerns were exacerbated within OPEC particularly after sanctions on Iran were officially ended. The country’s oil production spiked in January. According to media reports, Iran is reluctant to restrain supply as it wants to recover market share and feels that the economic benefits of lifting sanctions offset the drop in oil prices.