Doha meet was driven by geo-politics, not economics: Fadel Gheit

The oil producers meeting in Doha was a disappointment and no one had ever speculated it would impact the market significantly, says Azlin Ahmad, Editor, Crude Oil, Argus Media.Speaking to CNBC-TV18, Ahmad says oil workers strike in Kuwait led to production cut and induced a change in prices.While it is unlikely for prices to dip to USD 20 per barrel (bbl), she believes it may slide to USD 30-35 per bbl as market still remains oversupplied. If Iran increases its production rapidly to the 4-million-barrel target, it would put further pressure on the market, Ahmad adds.She says overall crude demand will increase by 1.2-1.4 million barrels on average for the year, particularly in India, where gasoline will play a big role. Tushar Bansal, FGE Singapore agrees with Ahmad and says growing use of automobiles will perk up the demand for gasoline across the world.Citi oil strategist Chris Main, expressing his opinion on the expected US stance, says shale producers will never be a part of this agreement.Calling this an act driven by geo-politics and not by economics, Oppenheimer senior analyst Fadel Gheit says it is not the US shale but Saudi Arabia, which is 'playing a game and using oil as a weapon' to austere supply in Asia from Iran and Russia. However, he expects oil prices to rise to USD 60 per barrel in one and half year.With a contrarian view, Narendra Taneja, the National Convener - Energy Cell of the Bharatiya Janata Party, says this meeting, with not just the OPEC members, but also the non-OPEC countries participating, was used to launch a new process to drive oil prices up.Watch video for more...