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Oil Volatile As Iran Denies Reports It Agreed To Deal
Oil Volatile As Iran Denies Reports It Agreed To Deal
Update (8:00 am ET): Oil prices spiked Friday morning before quickly fading after Reuters reported that Iran has agreed to the OPEC deal for 800,000 b/d of cuts – only for an Iranian delegate to swiftly deny that report, sending crude prices back from whence they came.
The Iranian delegate said there’s still ‘lots of haggling’ about a possible deal.
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Update (7:10 am ET): As furious negotiations continue on day two of the OPEC+ talks in Vienna, one OPEC delegate has informed BBG that the group has yet to finalize the final number for the cuts.
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Update (6:30 am ET): Boom…
OPEC TALKS IN VIENNA ARE DEADLOCKED: DELEGATE
Reports of the deadline followed headlines claiming that Iran had demanded that an exemption must be included in any agreement about production cuts. A counteroffer for Iran to agree to a “symbolic” cut has reportedly been categorically rejected by the Gulf Producer. WTI has moved back to unch on the day.
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Update (6:20 am ET): Expressing dissatisfaction with the terms of whatever deal has been discussed, Iran is reportedly holding out for language about an exemption for the struggling producer to be included in the agreement following three hours of talks on Friday.
It would be ironic if Iran – which has been blamed, along with Saudi Arabia and Russia, for triggering the collapse in oil prices due to the sanctions ‘exemptions’ on its oil exports extended by the US – ends up killing the deal, because the only less-desirable outcome for oil markets than a ‘baseline’ cut scenario would be ‘no deal’.
Oil prices are all over the place as the perceived prospects for a deal change with each new headline.
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This Week In Energy: Geopolitical Triggers Could Spur More Price Volatility
This Week In Energy: Geopolitical Triggers Could Spur More Price Volatility
Tensions heated up in the Persian Gulf this week after Iran fired upon and seized a cargo ship near the Straits of Hormuz. Considered to be the most strategic and vital chokepoint for global oil trade, the narrow stretch of water is regularly patrolled by the U.S. Navy. Oil prices briefly surged before it was known who was on board the ship. Once it became known that the ship was carrying a Marshall Islands flag and had no Americans on board, tensions calmed a bit. Still, the U.S. Navy sent a destroyer to the Straits in order to try to force the Iranians to back down. “At first appearance, this does seem to be provocative behavior, but we don’t have all the facts yet,” Col. Steve Warren, a Pentagon spokesman, said amid all the confusion. Iran insists the incident was a commercial dispute over unpaid debt, but there are fears that Iran thought it was targeting a U.S. ship. In any case, the incident will surely not be welcomed by U.S. President Barack Obama, who is seeking to reach a historic agreement with Iran over its nuclear program.
In another maritime dispute, the war of words between China and its neighbors over sovereignty in the South China Sea heated up this week as well. First came a statement from the Association of Southeast Asian Nations (ASEAN), which said that China’s reclamation work in the South China Sea “eroded trust and confidence and may undermine peace, security and stability in the South China Sea.” China’s Foreign Ministry followed up with a terse response, saying it was “extremely concerned” over ASEAN’s statement because the conflict was not one between China and ASEAN, but rather a dispute that should be resolved between China and individual nations.
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