The Saudi oil ministers says that they are ready to freeze oil production, but the price of WTI crude oil actually slides. A freeze is not a cut – probably not enough. Russia and Saudi Arabia will freeze production at January levels which are deemed as adequate. Is it adequate for markets?

Update: The Russians says that 4 other countries are on board with the freeze: not only Saudi Arabia and Qatar, where the meeting was held.

Another update As time passed by, the price of oil continues sliding, with $29.70 at the time of writing. This reflects further disappointment from the freeze. Markets don’t see this as a first step but rather a “too little, too late”.

WTI is battling the $30 level. It traded around $31.50 at the highs of the day and lost $30 on the initial news. It is still looking for a direction.

Not good news for CAD: USD/CAD already fell to 1.3706 earlier in the day as the price of oil advanced. It advanced mostly on the talk about a meeting between Russia and Saudi Arabia in Doha, Qatar. Well, the meeting can be described as a partial success.

It is important to note that even if Russia and Saudi Arabia decide to freeze, they are already pumping at near record levels. In addition, the US shale industry is showing resilience and Iran is coming back online.

The big question is: does this freeze act as a first step before cutting production later on? Or is it too little, too late?

Here is the chart of WTI crude oil. Note that the initial reaction was actually a bounce but it was extremely short lived and the price fell. The battle over $30 continues.

For USD/CAD, the high was 1.3830 on the disappointment, but the pair fell back to the 1.37 handle, still above the pre-breaking-news level.