Oil Steadies As OPEC Leans Toward New Output Cuts

OPEC                  AFP  Getty Images

OPEC AFP Getty Images

US West Texas Intermediate was also able to recover, having dropped below $50 per barrel for the first time since October of the previous year. The contract was little changed from last week's US$50.42 per barrel.

On Thursday, Khalid al Falih-Minister of Energy of Saudi Arabia-said that the state's oil production for the current month would cross October's output of 10.6 Million barrels per day.

Trading action was also held in check ahead of weekend meetings of the Group of 20 in Argentina, where oil talks are expected take place on the sidelines, ahead of an official meeting on December 6 between OPEC and its allies. An OPEC advisory committee suggested a 1.3 million barrel-a-day cut from October levels, according to a delegate.

U.S. President Donald Trump has repeatedly called on OPEC not to cut output as he thought oil prices should continue to fall.

USA crude stockpiles went through a 10th straight week of increase, up 3.6 million barrels in the week ending on November 23, piling concerns over supply surplus and sagging demand growth.

Russian Federation and Saudi Arabia agreed to extend into 2019 their deal to manage the oil market, known as OPEC+, although Moscow and Riyadh have yet to confirm any fresh output cuts. US crude oil imports averaged 8.2 million barrels per day, up by 608,000 barrels per day from the previous week. He already cautioned that oil shipments would be reduced by 500,000 barrels per day in the month of December.

On Friday, oil prices extended losses as piling stockpiles further dampened entrenched concerns over supply surplus, offsetting to some extent market expectations on potential output cut from OPEC and its allies.

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The oil reserves in the USA increased by 3.6 million barrels in the week to 23 November to 450,49 million barrels, according to the global energy Agency. WTI rose 1.16 USA dollars to settle at 51.45 dollars a barrel, while Brent rose 0.81 dollar to close at 59.57 dollars a barrel.

Both U.S. WTI and Brent, two global crude oil benchmarks, recorded their weakest month in November for over a decade, losing more than 20 percent.

Russian Minister of Energy Alexander Novak earlier on Friday said that he was comfortable with prices where they now are, adding to uncertainty about what top oil exporters can agree on.

Offering a hint on US production activity, Baker Hughes BHGE, -1.25% on Friday reported that the number of active domestic rigs drilling for oil rose by 2 to 887.

For now, the oil market remains divided on the outcome of the OPEC meeting.

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.

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