OPEC moves to combat plummeting oil prices

Cornelia Mascio
Novembre 14, 2018

In its monthly report, OPEC said world oil demand next year would rise by 1.29 million barrels per day, 70,000 bpd less than predicted last month and the fourth consecutive forecast cut.

"I think I was prodded by his excellency Khalid Al-Falih that probably there was a need for us to respond", he said.

"It is beginning to look alarming in the sense that the resurgence of non-OPEC supply - in particular shale oil from the United States - is putting a lot of pressure on this fragile equation", Barkindo said in Abu Dhabi.

They would therefore consider "options on new 2019 production adjustments, which may require new strategies to balance the market", they said in a statement at the end of the meeting.

This time, Saudi Arabia is urging allies to focus on the risk of rising oil inventories and forecasts for massive growth in rival supplies next year including USA shale.

Global oil supply has increased by 3.3% in 2018, while non-OPEC supply is growing faster and US oil production is up in the double digits.

The fall also came as the US -dollar hovered near 16-month highs on Tuesday, making oil imports more expensive for any country using other currencies at home.

USA benchmark West Texas Intermediate crude CLc1 fell 26 cents a barrel to settle at $59.93. Oman, a smaller member of the group, had said earlier it would support a cut by consensus of 1 million barrels a day.

A decision is expected only when the OPEC and non-OPEC ministers meet in Vienna on December 5 to assess the global energy market.

PRICE Futures Group's Phil Flynn and NovaPoint Capital's Joseph Sroka on the outlook for oil prices.

Traders said a strong U.S. dollar, which hit a 16-month high on Tuesday, also weighed on crude futures.

Commerzbank, Germany's second-largest lender, said on Friday that oil producers must act to prevent prices tumbling.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production", Trump wrote on Twitter.

Even as the Saudis floated the possibility of a cut in production, the selling has not abated.

He added: "If such a decision is necessary for the market and all the countries are in agreement, I think that Russian Federation will undoubtedly play a part in this".

Falih on Monday said inventories had been building up, adding that "the 25 producers will not allow this to continue" and that they had signalled they would do "whatever it takes to balance the market".

Khalid al-Falih's comments sparked a recovery in the price of global benchmark Brent crude, which rose to $70.83 a barrel and is on course for its biggest increase in a month. Barron's Al Root noted that changes in output from the particular world region can have an outsized impact on commodity prices due to the major difference in what it costs to produce oil in the kingdom versus other places in the world.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE