US Oil Production Surge Keeps Pressure on OPEC+ to Cut Supply

Ann Santiago
December 3, 2018

Besides, after their meeting, Brent oil price went up by 5%, which is $62,48 per barrel.

China and the United States agreed during a weekend meeting in Argentina of the Group of 20 leading economies not to impose additional trade tariffs for at least 90 days while they hold talks to resolve existing disputes. "There is no final deal on volumes but we together with Saudi Arabia will do it".

The Organization of the Petroleum Exporting Countries meets on December 6 to decide output policy.

The chief market analyst at XTB, David Cheetham, stated: "Speculation is mounting that Opec will deliver an output cut when they convene for their bi-annual meeting in Vienna next week, but whether it will be enough to stem the slide remains unknown".

The Alberta announcement came just hours after Russian Federation and Saudi Arabia agreed to extend their deal to manage the oil market into 2019, sending West Texas Intermediate prices up as much as 5.7 per cent.

In summer 2018, OPEC member states and exporting countries signed an agreement on increase of oil production for 1 million barrels per day.

US crude oil CLc1 was up $1.37 a barrel, or 2.7 percent, to $52.37 a barrel as of 6:07 p.m. EST (2307 GMT), while Brent LCOc1 , the global benchmark, gained $1.31 a barrel, or 2.2 percent, to reach $60.77 a barrel. On Thursday, WTI briefly dipped below $50 a barrel for the first time since October 2017 before rebounding in the wake of the Reuters report.

Prices, however, significantly pared much of their early Friday losses as speculation has grown over a potential production cut by major oil producers, ahead of the OPEC meeting. The production cut will be reduced to 95,000 barrels a day at the end of next year or when the province's storage tanks have been drawn down.

Putin said he had no concrete figures on the extent of the future output cuts.

Another element of the Saudi-Russian deal is that it functions as a face-saver for Saudi Crown Prince Salman Bin Mohammed, who is under fire as a result of the murder of Washington Post journalist Jamal Khashoggi in the Saudi consulate in Istanbul on 2 October.

Qatar in a surprise announcement on Monday said it would leave OPEC next month in a move that appears to have been meant to take a swipe at the group's de factor leader Saudi Arabia. "Moreover, demand-driven worries due to trade wars might subside, which should help lessen global growth concerns in the short term".

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