A meeting of the large oil producing countries is underway in Algiers today. As you might have sensed, this has already turned into a comedy serial. The participants have always managed to turn these meeting into a comedy so why not do the same again today? It is fun to watch though. 

At first, it looked like the Saudis and Iran were bound to reach an agreement this time after all the battles for market share and political confrontations. Saudis are Sunni Muslims while the Iranians are Shiite, which is a big deal in that part of the world. 

Anyway, the Saudis proposed to Iran to freeze the oil output at 3.6 million barrels per day (mbpd) in order for the Saudis to reduce their output, which is the amount Iran pumping up at the moment. Iran has been targeting 4 mbpd since the sanctions were lifted some time ago, but all oil producing countries want to increase their market share, especially after the decline in the price of oil. 

Brent oil which is traded in London and USD/CAD jumped higher right after these rumours started circulating around, but they quickly faded and the Loonie reversed back up, much higher than before the rumours. The reverse was partly due to weak inflation and retail sales from Canada. 

Iraq on the other hand wants to reach 5 mbpd, so who´s going to give in first? Well, no one. They all want a bigger market share, but the oil market is what it is right now. Those days of excessive demand are long gone.

Adding Russia to this and it turns into a basket case asylum. Russia said they might leave the Algiers before the OPEC meeting even starts. Russia wants OPEC members to reach a deal between themselves before participating. Meh, to our amusement, if the world economy doesn´t recover quickly we´re bound to see such funny stuff in the years to come