Oil prices slump on Saudi comments

Oil prices have fallen sharply after Saudi Arabia
said it would freeze production only if other
major producers did the same.
The comments by deputy crown prince Mohammed
bin Salman are seen as a challenge to Iran.
It has vowed to increase oil production following
the lifting of Western sanctions.
In the Bloomberg interview , the prince also spoke
about his plan for a giant public investment fund.
Worth more than $2 trillion, it would be designed
to reduce Saudi Arabia's reliance on income from
oil.

Part of the plan would be a sale of shares in the
state-owned oil firm Aramco, which could start as
soon as next year, according to the interview.
Production freeze
Iran will not take part in a conference in Doha on
17 April, where the freezing of oil output is due to
be discussed.
"If all countries agree to freeze production, we will
be among them," the prince told Bloomberg .
When asked whether Iran needed to be among
those countries he said "without doubt".
Oil prices, which had edged into positive territory,
fell after the Prince's comments.
Brent crude fell $1.63 cents, or 4%, to $38.70 a
barrel. Prices rose 6% in the first three months of
this year - the first quarterly increase since a 15%
rally between April and June 2015.

Hopes dashed

PVM Oil Associates analyst Tamas Varga said there
had been high hopes about the impact of a possible
production freeze, but he added: "It is hard to see
how sticking to the January output level would be
supportive for oil prices. There will be no
rebalancing this year."
Shailaja Nair, of energy information provider, said
the market was still oversupplied with crude and
there was no possibility of demand increasing in
the short term.
"Considering the amount of crude already in the
market, a freeze is not going to make much of a
difference," she said.
A monthly survey by Reuters this week showed that
oil output from the 13 Opec members rose in
March on higher production from Iran and near-
record exports from southern Iraq.
Iraq reported Opec's biggest supply growth last
year, producing more than four million barrels per
day - making it the cartel's second-largest producer
after Saudi Arabia.
In February, Saudi Arabia and Russia said they
would freeze oil output at January levels if other
producers followed suit.
Oil prices have plunged from their recent peak of $
116 in June 2014 because of oversupply and
sluggish demand.
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