Oil prices fall on swelling glut, economic growth concerns

Oil prices skid amid global stock market slump, swelling US supply

Negotiations between OPEC members are fraught, however, as some feel that Saudi Arabia wields too much clout in setting policy.

The US is not in a position to tell OPEC or Saudi Arabia what to do, Saudi Energy Minister Khalid al-Falih told journalists when asked about Donald Trump's reaction to curbing production of crude by the kingdom or the oil cartel. Beyond that, we also have the jobs number coming out of the United States, that of course can move the markets as far as demand is concerned as well.

Saudi Arabia sought to persuade Russian Federation on Wednesday to cut oil production substantially with OPEC next year in an attempt to arrest a decline in the price of crude and prevent another global glut.

"Hopefully OPEC will be keeping oil flows as is, not restricted".

Oil prices dipped on Thursday in tepid trading ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October.

A reduction of between 0.5m barrels per day and 1.5mb/d is on the table, with experts saying around 1mb/d looked the most likely.

USA crude oil stockpiles fell last week due to a surge in exports, as the country became a net exporter of crude oil and products for the first time, underscoring the nation's growing prowess as a global supplier of oil and refined products.




According to information published in OPEC's monthly oil report, Saudi Arabia's crude oil production in the third quarter ended September 2018 increased to 10,422 thousand barrels per day (tb/d), from 9,992 tb/d recorded in the corresponding quarter a year ago.

One issue that might complicate relations between the U.S. and OPEC is the murder of Saudi Arabian journalist Jamal Khashoggi by people linked to the government in Riyadh. The alliance has transformed OPEC into a duopoly in which Russian Federation, which isn't a formal member of the cartel but part of the production cuts alliance, is asserting its power. Given the economic sanctions being reimposed by the US, Tehran doesn't intend to join any agreement for cutting production, the country's oil minister Bijan Namdar Zanganeh said.

Otherwise, he added, the United States official has adopted an unprofessional, naïve, and meddlesome approach.

A cut of about 1 million barrels a day from the whole group should be adequate and "certainly we don't want to shock the market".

Saudi Arabia, OPEC's de facto leader, has made clear that it won't shoulder the burden of trimming production alone. Whether to exempt Iran from making any cuts was one sticking point in the meeting, said a delegate.

Although Russia, the largest producer in the wider group known as OPEC+, agreed to a cut in principle, the eventual size of their contribution remains undefined and will be key to putting together the final deal.

Qatar, a Saudi rival and Iranian ally, said this week it would leave OPEC in January.

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