Published: Thu, December 06, 2018
Business | By Eloise Houston

Oil prices skid amid global stock market slump, swelling USA supply

Oil prices skid amid global stock market slump, swelling USA supply

The group may agree a formal cut of under a million barrels a day, Nigeria's oil minister, Emanuel Kachikwu said in a TV interview on Thursday morning.

Oil markets rose on Wednesday ahead of the meeting.

"If Mr. Hook has come to Vienna to apply for United States membership in OPEC, and this is the reason why he meets OPEC members, the request can be reviewed", Zanganeh told SHANA.

The producer group's de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from U.S. President Donald Trump to push oil prices lower. As ministers sat down at the headquarters of oil cartel Opec, Russian oil minister Alexander Novak flew to St Petersburg to meet President Vladimir Putin to decide on their country's contribution. "The World does not want to see, or need, higher oil prices!" said Trump, who has in the past repeatedly accused the cartel of keeping prices artificially high.

Led by Saudi Arabia, OPEC's crude oil production has risen by 4.1 percent since mid-2018, to 33.31 million barrels per day (bpd).

Oil market watchers were expecting a supply cut of around 1.2 million to 1.4 million barrels per day, and Al-Falih's comments caused prices to slide.

"I think the likelihood is that they will cut crude production rate, maybe not as dramatically as some people would like, to try and meet a balance between what the USA would like and their own personal interests".

The slide in U.S. oil followed a tumble in global stock markets on Tuesday and Wednesday, with investors anxious about the threat of a widespread economic slowdown.

International Brent crude oil futures LCOc1 were at 61.04 dollars per barrel at 0531 GMT, down 52 cents, or 0.8 per cent from their last close. Those differences persisted after Wednesday's meeting, OPEC delegates said.

The wait for Moscow signals how much Opec has changed since 2016 when Saudi Arabia and Russian Federation ended their historic animosity and started to manage the oil market together.

OPEC is also riven by internal conflict, especially between regional rivals Saudi Arabia and Iran. Saudi Arabia, Russia and the UAE have raised output since June after Trump called for higher production to compensate for lower Iranian exports due to new USA sanctions. The OPEC-Russia alliance was made necessary in 2016 to compete with the United States' vastly increased production of oil in recent years. 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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