THE WALL STREET JOURNAL, Feb. 2, 2016– Crude prices cracked below $30 a barrel again as traders continue erasing a recent surge from speculation that the world’s major exporters will cooperate on output cuts.
Oil’s latest rallies have repeatedly faded and now more than a week of gains appear on their way to fully unwinding as hopes for output cuts fade. Several bank analysts have called speculation on output cuts unfounded and brokers say traders are now getting out of bets that some type of coordination would send prices higher.
Light, sweet crude for March delivery recently traded down $1.61, or 5.1%, to $30.01 a barrel on the New York Mercantile Exchange. It has been as low as $29.81 a barrel. The contract for front-month April Brent, the global benchmark, recently fell $1.71, or 5%, to $32.53 a barrel on ICE Futures Europe.
Several leaders of the Organization of the Petroleum Exporting Countries have repeatedly rebutted suggestions of coordination. Persian Gulf Arab oil producers said as recently as Monday they don’t want an emergency OPEC meeting, preferring to hold any discussions only after they have a clearer picture of how new barrels of Iranian oil are affecting the market now that Western sanctions have ended.
 “We’re not going to have this emergency meeting. We’re not going to have this cut,” said Tariq Zahir,who oversees $6 million as managing member of Tyche Capital Advisors LLC. “I was laughing at it and shorting the hell out of it.”
Several banks have published with similar conclusions, includingGoldman Sachs and Barclays on Monday. Russia and Saudi Arabia are in a neck-and-neck competition for customers, especially in China, and Iran will likely join them now that it can ramp up exports after international sanctions have ended, Michael Tran, commodity strategist at RBC Capital Markets wrote on Tuesday.
“It would be premature for countries to discuss a potential cut before assessing the magnitude of what Iran can or plans to bring back to market in the coming months,” he said.
There would have had to have been a deal to get prices to keep rising, analysts have said.
After market gains last week, downbeat sentiment has returned amid continued concerns about global oversupply and softening industrial data in economic powerhouses such as China.