Tuesday, October 11, 2016
Oil slid after the 'scariest man on earth' said no to freezing production
The price of oil is dropped substantially on Tuesday morning after Igor Sechin, the president and chairman of Russia's state oil company, said he saw no reason for an immediate freeze or cut in oil production.
Crude-oil prices on Monday had risen to their best levels of the year after Russian President Vladimir Putin said he hoped the OPEC cartel of oil-producing countries reached an agreement over production limits.
"Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join," Putin said while speaking at an energy congress in Istanbul, according to Reuters.
Speaking with Reuters at the same conference, however, Sechin — often referred to as "Russia's Darth Vader" and once dubbed the "world's scariest man" — questioned why he would take part in a cut and said Rosneft would not cut or freeze oil production as part of any possible agreement with OPEC, of which Russia is not a member.
When asked on the sidelines of the conference in Turkey about the potential for a freeze or a cut, Sechin said, "Why should we do it?"
Sechin also cast doubt on whether some members of OPEC would even be willing to join in with a cut. "Try to answer this question yourself," he said. "Would Iran, Saudi Arabia, or Venezuela cut their production?"
Sechin is one of Putin's closest allies, but his comments are almost the opposite of what Russia's president said on Monday, suggesting potential conflicts in Russia's official stance on oil.
His words caused oil to slip a little off its best levels from Monday, with both major benchmarks lower by about 1% on Tuesday. The slide was made even worse after new data from the International Energy Agency showed that production reached its highest level, clearly showing the scale of the challenge facing OPEC as it tries to boost prices.
However, around 2.10 p.m. BST (9.10 a.m. ET), oil has pulled back from its losses and with both major benchmarks down just 0.2%. Brent crude, the international benchmark, is at $53.03 a barrel, a drop of 0.21%, while US West Texas Intermediate crude had lost 0.18% to trade at $51.26.
Here is how Brent looks: