European stocks hammered by failed Doha oil talks
On Monday, European shares dipped, led by energy stocks, when a gathering of major oil players in Doha ended without a long-awaited output freeze.
The Stoxx Europe 600 index was deprived of 0.6% at 340.76, compared to last week’s 3.3% soar.
The gas as well as oil sector weighed the most on the index, because crude prices lost 5% right after Doha failure. Key oil players, supplying almost half of the world’s crude output had a meeting in Doha to work out ways to prevent oil from falling. Unfortunately, they failed to come to a compromise on this issue, despite a huge hope in the markets.
The negotiations failed when Saudi Arabia, OPEC kingpin, demanded that Iran should also cap its crude output. Iran rejected that proposal, arguing the country is eager to return its output to pre-sanction levels before limiting production.
The short-term impact on crude prices is quite clear as it’s seen today, morning. As for a longer term, it’s hard to foresee. At least, supply doesn’t seem to edge down this year. Currently, OPEC’s power over prices is much weaker than it used to be.