Oil prices rise by more than 1% after Saudi announcement

Oil prices rise by more than 1% after Saudi announcement

Oil prices rise by more than 1% after Saudi announcement

The price of West Texas Intermediate (WTI) for December delivery and Brent crude for December delivery lost 4.7 percent and 3.6 percent, respectively, during the week ending November 9. USA crude has lost 28 percent since its early October peak.

Taiwan was flat, Seoul slid 0.3 per cent, and Sydney closed up 0.3 per cent.

The sanctions lifted supply concerns and concerns over economic slowdown, which may curb fuel demand.

"Saudi Arabia can not act alone though - realistically it needs to pull together OPEC allies, and critically Russian Federation, to curb production if it wants prices to hold", he added. The administration had been counting on Saudi Arabia to assure oil supply to prevent a run-up in prices.

Saudi Arabia expresses the need for oil producers to cut 1 million barrels a day from October levels.

On Thursday, the United States granted Iraq a 45-day exemption from sanctions which it reimposed on Iran. Analysts believed the exemptions relieved concerns over volatility in global market caused by US sanctions against Iran.

After a meeting in Abu Dhabi, several oil producers - including those not part of OPEC - said they had "reviewed the current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements".

Higher oil prices will help Saudi Arabia to maintain budget balance in that time, as Riyadh is under strong diplomatic pressure after the assassination of Jamal Khashoggi. Brent (LCOc1) dropped $2.96, or 4.2 percent, to a low of $67.15 a barrel. "As such, crude oil inventories are starting to increase once again", Bank of America Merrill Lynch said in a note.

According to official figures, oil production in Bakken alone rose to the record level of 1.3 mln bpd last month, bottlenecking the majority of rail and pipeline routes. "I think those reports are going to be even weaker because they will have to adjust for the increase in us production." .

US crude futures CLc1 settled down $4.24 a barrel, or 7.1 percent, to $55.69 a barrel.

A deal between the OPEC oil exporting nations, the biggest one being Saudi Arabia, and non-OPEC oil producers (known as OPEC+) was signed in December 2016. OPEC and the IEA (International Energy Agency) are releasing their updates to the oil market this week and the outlook for 2019 was already on the weak side.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production", Trump wrote on Twitter.

The rig count is an indicator that U.S. crude production, already at a record 11.6 million barrels per day (bpd), will increase further.

Although OPEC was unable to reach an agreement with other non-OPEC producers who also attended the Sunday meeting, OPEC made it known that it is going ahead with the proposed cuts come next year. They fell below the 60-dollar mark.

Meanwhile, investors' sentiment is clouded by uncertainty over how oil demand would develop, as some industry insiders predicted deteriorating demand. "Oil prices should be much lower based on supply!"

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