Mubasher: Oil prices dipped earlier on Thursday as stock markets plunged, but trading was tepid in the run-up to a meeting by members of the Organization of the Petroleum Exporting Countries (OPEC).
The OPEC meeting was set to result in a supply cut aimed at clearing a glut which dragged oil prices down by 30% since October.
By 8:10 am GMT, US Nymex crude futures fell 0.32% to $52.72 per barrel (pb), while international benchmark Brent futures dropped 0.37% to $61.33 pb.
Crude prices were pulled down by sluggish global financial markets, which saw stocks slumping on Thursday, according to traders.
“Investors need to lower their expectations,” Barclays bank urged in its Global Outlook on Thursday, adding that the next year should see “lower returns and higher volatility.”
“The global economy to slow over the next several quarters,” the UK lender said, but added that “not one major economy is near recession.”
Since early October, oil slid nearly 30% of its value as output surged, and worries mounted over an economic slowdown would dampen fuel demand.
Oil production from the world’s three largest producers OPEC, Russia and the US rose by 3.3 million barrels per day (bpd) since the end of last year to a total of 56.38 million bpd, which meet around 60% of global demand.
Saudi-led OPEC’s crude output climbed 4.1% since mid-2018 to 33.31 million bpd.
OPEC members would meet in Vienna on Thursday to discuss the production policy, while non-OPEC producer Russia would meet with the producer group on Friday to decide production levels, amid wide expectations of an agreement on a supply reduction.
“Markets [...] believe the production cut deal will be in range of 1-1.3 million bpd,” Australia and New Zealand (ANZ) bank said.