Mubasher: Oil prices slid on Friday as the Organization of Petroleum Exporting Countries (OPEC) moved to postpone a final decision on production cuts, awaiting support from Russia for supply reduction.
By 8:06 am GMT, US Nymex crude futures dropped 0.89% to $51.03 per barrel (pb), while international benchmark Brent futures fell 0.77% to $59.60 pb.
The falling prices came after a plunge of nearly 3% in the previous session, after an OPEC meeting at its headquarters in Vienna ended without a decision on supply cut, while it was expected to discuss the matter in the day.
Russia looked to reduce its oil production by a maximum of150,000 barrels per day (bpd) for the first three months of the next year, RIA news agency reported on Friday, citing a source.
As economists projected the producer group to cut more output than Russia, they warned that a substantial reduction would be required to reverse a plunge in oil markets.
“Reversing the overwhelmingly bearish price sentiment will likely require a credible and cohesive message from the OPEC meeting,” Jefferies said.
“Even a 1 million bpd cut could lead to a ‘sell the news’ reaction in the short term,” the US investment bank noted, adding that in the event of failing to reach an agreement, oil prices would endure “significant downside.”
Since early October, oil prices have slumped by 30% as production surged, while demand outlook went bearish amid global economic downturn.
Oil production from the world’s top producers, OPEC, Russia and the US, climbed by 3.3 million bpd since the end of last year, to a total of 56.38 million bpd, meeting around 60% of global demand.
The surge mainly came as the US ramped up its crude production by 2.5 million bpd since early 2016, hitting a record of 11.7 million bpd.
Having become the world’s largest oil supplier, the US last week shipped more crude oil and fuel than it imported for the first time on records from 1973, data released on Thursday showed.