Will oil price shoot up again?

Will oil price shoot up again?

Will oil price shoot up again?

OPEC and allied oil-producing countries will likely need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market after US sanctions on Iran failed to cut Tehran's output, Saudi Arabia's energy minister said Monday.

UAE Energy Minister Suhail al-Mazrouei, left, talks to Khalid Al-Falih, Saudi Energy and Oil Minister, in the opening ceremony of the Abu Dhabi International Exhibition & Conference, ADIPEC, in Abu Dhabi, United Arab Emirates, Monday, Nov. 12, 2018. Russia, another major producer, struck a more measured tone however, saying it preferred a wait-and-see approach.

"I would not want to focus purely on production cuts", Russian Energy Minister Alexander Novak said in a Bloomberg television interview.

"This is not the ultimate goal, to cut or not to cut", he added.

Root added that commodity prices that are influenced by cartels such as OPEC, which controls almost a third of global oil production, do not necessarily rise and fall with economic cycles.

Oil prices fell by around 1 percent on Tuesday, with Brent crude sliding below $70 per barrel and WTI below $60, after U.S. President Donald Trump put pressure on OPEC not to cut supply to prop up the market.

He said market sentiment had shifted from fears of shortages to worries about oversupply.

Oil prices rose by about one percent on Monday after top exporter Saudi Arabia announced a cut in supply for December, seen as a measure to halt a market slump that had seen crude decline by 20 percent since early October. OPEC members may be weighing oil production cuts again, anxious that a slowing global economy will undermine prices, but in the group's Middle East heartland producers are spending billions to add output capacity for the long term.

The energy minister of the United Arab Emirates, Suhail al-Mazrouei, now the president of OPEC, said "changes" likely would be necessary as the oil cartel meets in December in Vienna.

In June, Saudi Arabia persuaded fellow oil producers to end 18 months of production cuts and pump more crude in response to falling output in Venezuela and Iran.

The Saudi Energy Ministry said on Sunday that Al-Falih appreciated the cooperation of all producers to ensure the "stability of the markets" and that there were "sufficient supplies".

"Many of us share this view", the minister said when asked about the need for a cut. Oman is also not a member of OPEC. USA crude rose 60 cents to $60.79 a barrel, the first increase after the longest stretch of daily declines since 1984.

Brent and West Texas Intermediate futures have bounced 1.2% on Monday, to $71 and $61 per barrel, respectively.

Meeting in Abu Dhabi to examine how to curb a sharp slide in oil prices, the producers said they "reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements".

During a meeting in Baghdad, Iraq and Saudi Arabia's oil ministers also discussed an electricity grid connection between the two countries to meet Iraq's power needs, he said.

The group said Sunday it would "continue closely monitoring" oil market conditions, before adding that "new strategies" could be implemented to balance the market in 2019.

"On a global basis, we aren't seeing enough supply to keep the market adequately supplied in the mid-2020s", Mallinson of Energy Aspects said.

Related news