Trump asks OPEC not to cut production

Oil prices fall on swelling glut, economic growth concerns

Oil prices fall on swelling glut, economic growth concerns

Negotiations between OPEC members are fraught, however, as some feel that Saudi Arabia wields too much clout in setting policy.

A day of talks in the Austrian capital on Wednesday concluded with a panel led by Saudi Arabia and Russian Federation - the group's most powerful members - recommending an output reduction lasting six months, Oman's Oil Minister Mohammed Al Rumhy told reporters. The market has been lower all day due to concern that planned production cuts from the Organization of the Petroleum Exporting Countries will be smaller than originally anticipated.

At a crunch meeting in Vienna this week, the Opec cartel has tried to plot a course between protecting member countries' revenues and not angering Donald Trump who on Wednesday called for oil to keep flowing in order to hold down prices. An oil price around $60 suits the needs of producers and consumers and it should remain at that level in January, he said.

Some experts say that gives the USA some leverage over the Saudis, though Al-Falih denied that on Thursday.

Oil producers appeared to be coalescing around a plan to remove 1.3 million barrels per day from the market earlier in the week.

The price of crude has fallen nearly a third since October but Trump has demanded OPEC make oil even cheaper by refraining from output cuts. It's nearly certain that Russian Federation will give the green light to cuts but it looks like it'll only be the bare minimum as to what markets are expecting.

During Thursday's meeting, OPEC leaders are expected to discuss how to stabilize crude oil production after US prices plunged by 22-percent in November - making it the worst month since the financial crisis in 2008.




Khashoggi, a prominent critic of the polices of Saudi crown prince Mohammed bin Salman, was killed in the Saudi consulate in Istanbul on 2 October. The cartel and its allies are meeting in Vienna this week, trying to make a tough choice to cut output and support prices, risking the loss of more market share to the US.

The Saudi minister pointedly said Washington should back off.

"The number that we need is going to be less than 1.3 [million]".

A cut of about 1 million barrels a day from the whole group should be adequate and "certainly we don't want to shock the market".

"They should know that OPEC is not part of their Secretary of Energy", said its minister Bijan Namdar Zanganeh.

On paper, the shift to net oil imports means that the U.S. is today energy independent, achieving a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush.

Although Russia, the largest producer in the OPEC+ group, has agreed to a cut in principle, the eventual size of their contribution remains undefined and will be key to putting together the final deal. "Given the recent ramp-up in supply from these producers, this represents a year-on-year decline in crude output of just 0.2 million barrels per day for 2019", Hittle said. While it said it was purely a practical decision because it mainly produces natural gas and little oil, the move was viewed as a symbolic snub to the Saudi-dominated organization.

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