RE:Oil Meeting ResultsAgree with you Fantome. Doesn't surprise me. Though as promised, I will provide the optimistic side of things.
I was thinking the 2 possible outcomes would have been a freeze, or "we will agree to talk again later - ie no agreement". I do think it provides a framework for future talks and possibly a bit of a floor to the market. the fact that they went so far as to meet and "take action" though I agree the action taken is not particularly meaningful. In my opinion what we will see from here is less rhetoric from Saudi Arabia to keep oil down (ie a fundamental shift from the last number of months). In my opinion, if Saudi was truly looking to finish the job and crush shale, the result would have been "no agreement - discussion only, no set plan to talk later". Freezing production, though somewhat meaningless, was a direct step toward cooperation and stabilizing the market. To me, I see this as the beginning of the end. My base case was 1. cooperation between OPEC members to "control" production, 2. allowing to shale production decrease to play out, 3. price stabilizes/rises (probably briefly spikes) and slowly improving golbal growth does the rest. I understand people are skeptical, but the one thing that came out of this meeting is that the Saudis did not purposely throw cold water on the market to stem any price increase. Good news in my book and sooner than I expected. We will see where it goes from here. Adherance is an issue - but is a welcome change in Saudi's behaviour.
JMO GLTA