Oil continues to slip on rising supply

Saudi energy minister Khalid al Falih is looking to cut oil production to shore up sagging prices

Saudi energy minister Khalid al Falih is looking to cut oil production to shore up sagging prices

But since May, Opec+ have ramped up output while at the same time the USA continued to grow its oil production, which reached a record of 11.6 million bpd earlier this month.

Brent crude fell by 4.2 per cent to $67.15, touching its lowest since March.

The latest falls came after oil cartel Opec reduced its forecast for global oil demand next year. This sharp drop not only marks the end of the current twelve-day decline streak but also is the lowest mark for the last twelve months as well, furthering the plunge into a bear market.

"This tweet certainly did not help prices", ING commodities strategist Warren Patterson said.

Russian President Vladimir Putin on Thursday avoided giving a direct answer on whether production should be limited, but said he had discussed the situation in global oil markets with U.S. President Donald Trump.

U.S. bank Morgan Stanley said in a note on Wednesday that China's economic "conditions deteriorated materially" in the third quarter of 2018, while analysts at Capital Economics said China's "near-term economic outlook still remains downbeat".

The markets will be facing an oil glut in 2019 as supply will outpace demand.

The slump in spot prices has turned the entire forward curve for crude oil upside down.

"About $70 per barrel suits us perfectly well considering that the expenditure side of our budget is based on $40 per barrel", Putin said.

A new round of OPEC-led supply cuts in 2019 would further support US shale oil production, potentially repeating the cycle that played out in 2014.

Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since a price collapse in 2014.

As recently as September and October, leading oil traders and analysts were forecasting oil prices of $90 or even $100 a barrel by year-end.

Global supply has instead surged, led by soaring output from the world's three-biggest producers - the United States, Russia and Saudi Arabia - who in October broke through joint output of 33 million bpd for the first time, meeting more than a third of total oil consumption.

"While slower economic growth in some countries reduces the outlook for oil demand, a significant downward revision to our price assumption is supportive", it added.

He urged the Federal Government to put in place measures to improve oil production, adding that OPEC will soon exempt Nigeria from crude oil cut imposed on the country and Libya since a year ago.

Weekly EIA report shows a 10.3 million barrels increase in United States crude stocks.

Oil began to climb Monday when Saudi Arabia said that it would boost prices.

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