Expectations ahead of Sunday's meeting of the major oil producers in Doha were extremely low, and yet somehow the outcome was still a disappointment.
Oil shares have been knocked for six by the failure of the participants to agree on a production freeze, with the main sticking point reportedly being Saudi Arabia's insistence that Iran, which has only recently started cranking out the oil at pace after sanctions were lifted, should participate in any cap on production levels.
Brent crude for June delivery was off 2.6% at US$42 a barrel in mid-morning trading, although some consolation could be drawn from this being more than a dollar above its low point for the morning.
Energy producers great and small have taken a biffing on the London stock market this morning, though the tiddlers seem to have been more harshly treated.
Chariot Oil & Gas Ltd (LON:CHAR), down almost 10%, was the hardest hit, followed by Empyrean Energy Energy PLC (LON:EME), the onshore US specialist operating within the Eagle Ford Shale, which was down 8%.
Saudi Arabia's intransigence on limiting production during the oil glut has widely been attributed to its desire to drive US shale operators out of business.
“Saudi Arabia has single-handedly driven this crash in crude prices, from masterminding the strategy to push US shale out of business, to vetoing any suggestion of cuts at any OPEC meeting. It has the biggest wallet and is willing to suffer in the short-term for the promise of a greater share of the bounty in the long run. How long this will play out for will be reliant on how long the US can maintain its production. However, as seen over the weekend, Saudi Arabia plays by its own rules and oil bulls will be wary of that,” suggested Josh Mahony at spread betting firm IG Index.
Nighthawk Energy PLC (LON:HAWK), another onshore US operator, offers a bit of hope to Empyrean shareholders; its shares initially fell from 1.13p overnight to 1.05p before recovering to show a 2.2% rise at 1.15p.
UK continental shelf explorer Enquest PLC (LON:ENQ) has not escaped the carnage, shedding 6.4% at 29.95p, while another mid-cap with interests in the North Sea, Premier Oil PLC (LON:PMO), was off 4.6%.
Among the big boys, Royal Dutch Shell PLC (LON:RDSB) was 1.7% weaker, faring slightly worse than BP PLC (LON:BP.), which was down 1.4%, suggesting that the majors are viewed as being better placed to weather the continuation of the low oil price environment.
Gulf Keystone Petroleum Ltd (LON:GKP), up 28%, defied the trend but it is only clawing back a fraction of the losses suffered since it announced last week that it would need a pile of money to keep its oil assets producing at current rates.
Independent Oil & Gas PLC (LON:IOG) also behaved in contrary fashion, rising 9% to 16.5p. The shares have almost doubled over the last month since it received a £13.55mln infusion of cash from London Oil & Gas that it intends to use on acquiring “complementary near term oil and gas developments and low risk production assets in the North Sea”.
The way things are going, the price of those assets is continuing to slide, as there seems little prospect of an end to the oil glut.
“OPEC is set to have its next bi-annual meeting on 2 June,” noted Danska Bank.
“The group may take another shot at finding common ground on some sort of output freeze, although the failure in Doha this weekend highlights the divide between particularly Saudi Arabia and Iran,” the bank suggested.