"The rebound in prices yesterday was weak as President Trump could criticize OPEC again when oil approaches $60, and that may force the group to weaken its production cuts again", Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp said by phone from Tokyo.
"Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market", OPEC said in the report. This is despite the fact that Saudi Arabia cut 500K barrels for December and signalled that it looks like OPEC is going to cut production.
The International Energy Agency expects crude and condensate output in Russian Federation to stand at 11.2 million barrels per day this year and to increase up to 11.5 million barrels per day in 2019, according to its Oil Market Report.
Even as the USA was planning to grant the Iran waivers, Trump was badgering other members of OPEC to boost production to make up for any loss of Iranian supply.
Much of the expectations of the supply cuts were driven by earlier comments from Khalid Al-Falih, energy minister for Saudi Arabia, who told media that producers need to cut about 1 million barrels per day (bpd) from October production levels. State-run Indian Oil Corp was trading 6.94% higher on the BSE.
The International Energy Agency (IEA) and OPEC this week warned of a sizeable surplus at least in the first half of 2019, and possibly beyond, given the pace of growth in non-OPEC production and slower demand in heavy consumers such as China and India. They partially unwound their reduction in June after pressure from Trump to lower prices.
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Brent for January settlement climbed $1.01 to $67.13 a barrel on the London-based ICE Futures Europe exchange. Output, however, rose by 127,000 bpd to 32.9 million bpd, Opec said.
The United States hit the country's oil exports on November 5, introducing the second package of sanctions.
"We are talking about a cut from everyone, including Nigeria and Libya because their production has exceeded the cap in recent months", one source said.
The producers will take whatever steps are necessary to keep the market stable and keep crude inventory levels where they are, Mr Al Mazrouei said.
"We are closely following the development of the situation on the energy markets".
OPEC's boss says current market volatility is due to anticipation of the cartel's impending summit. The U.S. benchmark's 50-day moving average crossed below its 100-day moving average earlier this week, another bearish signal.