Oil prices slip on concerns of looming oversupply, economic downturn

Oil prices slip on concerns of looming oversupply, economic downturn

Oil prices slip on concerns of looming oversupply, economic downturn

For the first half of 2019, based on its outlook for non-OPEC production and global demand, and assuming flat OPEC production, the IEA said the implied stock build is 2 million bpd. On Oct. 3, when global benchmark Brent crude was sitting around its own four-year high of around US$85 a barrel, Saudi Arabia and Russia announced that they were increasing production in October and November; it was also reported that the Saudis and the Russians had agreed privately to raise production throughout the remainder of the year, in part in response to USA pressure to put a cap on prices.

Additionally, any talk of production cuts will likely raise the ire of President Trump who may have single-handedly driven prices lower on Monday when he told OPEC not to cut production. The agency raised its forecast for oil output growth from countries outside the Organisation of Petroleum Exporting Countries to 2.4 million bpd this year and 1.9 million bpd next year, versus its previous estimate of 2.2 million bpd and 1.8 million bpd, respectively.

Oil has tumbled to its lowest price in a year as concerns mounted about rising output and slowing global demand.

Oil began to climb Monday when Saudi Arabia said that it would boost prices. In July, Trump called the organization a "monopoly", warning on Twitter that "gas prices are up & they are doing little to help".

However much the US waivers impacted market sentiment, Iran sanctions are still not nothing in real terms. OPEC meets on December 6 to set policy for 2019.

That's according to the International Energy Agency.

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He said the increase in shortage and price of crude oil is expected to occur in the event that the sanction continued, adding that the issue is going to impact tremendously on the earnings of Nigeria, which relies on revenues from oil to sustain itself.

Opec secretary general Mohammad Barkindo said the rise of non-Opec supply was beginning to look "alarming".

One of the three sources said a minimum cut of 1 million bpd was being considered and it could be larger than 1.4 million bpd. "The products are definitely supporting us right now". The surge in production has made the US the world's biggest producer.

But after the sharp selloff on Tuesday, putting Brent back into the mid-$60s and WTI in the mid-$50s, top OPEC+ officials seem to be growing more concerned. "The market is quite volatile today".

Crude in the USA dipped below US$55 a barrel this week for the first time in a year amid renewed fears of a glut, with domestic production at record-highs, rising OPEC output and waivers meant to ease the impact of sanctions against Iran.

One of the three sources said any cut for Russian Federation could be gradual, citing the example of the 2017 output reduction deal when Moscow delivered its share of the cuts in phases.

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