Total’s Pouyanne says does not expect pressure on oil price

Oil prices sank as the OPEC cartel decided not to cut output despite the global oversupply that is battering the market. Brent crude in London slid as much as 0.9 percent to $42.62. Options data shows holdings of December 2016 put options at $25, $30 and $35 a barrel have risen 41 percent in the last two months and open interest in those three contracts now equates to almost 90 million barrels of oil.

In June previous year, crude had traded above US$100 a barrel, but has since plunged on a global supply glut, weak demand growth and a strong dollar. “The emotional impact of the latest OPEC meeting would suggest that prices might accelerate in their fall but I think the direction is obvious, they will get lower”, Warren Gilman, chairman and CEO of CEF Holdings, told CNBC’s Capital Connection. At the same event, Rinehart said while the mine project is low-priced and better positioned than competitors, “none of us are thrilled with the ore price”. ‘If OPEC reduced production bolster oil prices, the beneficiaries would not be the countries of the Middle East, but the unconventional producers of North America’.

The only element that will matter the most for Opec members is if they want to keep the united front or not.

OPEC met in Vienna, there were some enthusiasm in the market that there could be some consensus and production cut, instead the meeting turned out to be so grim, that only few of the oil ministers commented afterwards.

“There is significant excess supply capacity around the world now that if OPEC give up their share, they’re just inviting someone else to take it”, Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone.

This could possibly harm the ability of US shale producers, among the casualties of OPEC’s strategy of pumping hard to retain market share, to lock in profitable prices for future deliveries.

The group of Del Pino wanted 5% production cut among OPEC members.

OPEC has agreed to raise its output ceiling to 31.5 million barrels per day at a meeting on Friday, OPEC sources said in what appeared to be an effective acknowledgment of existing production.

Barring a major geopolitically driven shock, this set of dynamics will mean that oil prices will stay low and volatile for a while. ‘Whether such a tactic will do anything more than merely delay the march of U.S. oil production is another matter altogether’.

More than 145 million tons of supply will be brought on stream next year and in 2017, according to Fitch Ratings Ltd., which has forecast that prices are unlikely to recover. The Persian Gulf nation is seeking to boost crude exports next year when global sanctions over its nuclear programme are removed.

Oil markets are pricing in a “no change scenario” in terms of OPEC’s production, with the 12 member producers’ collective poised to confirm this later on Friday. Going ahead, Goldman expects Opec output to come in closer to 31.8 million barrels per day.