Oil Losses Steepen, OPEC Indecisive On Level Of Production Cuts
WTI grade crude oil is once again threatening to break below the $50-per-barrel barrier following two sub-$50 sessions in late November.
Oil opened Thursday's session modestly lower at $52.67, but gyrated between $53.28 and $50.24 amid news emerging out of Vienna, where OPEC converged to discuss production cuts in a bid to stabilize prices. At time of publication, a barrel of oil was trading around $50.98, down 3.61 percent from the previous session.
OPEC reportedly agreed to cut production, although it hasn't zeroed in on how much should be cut, even as it concluded its meeting Thursday. Oil prices have slid about 15 percent for the year amid surging production levels, waning supply concerns and muted demand forecast. Since October, oil has dipped 30 percent.
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Why It's Important
Saudi Arabia, the largest producer among OPEC members, is under pressure from the U.S. to keep production quotas unchanged. In a tweet ahead of Thursday's meeting, President Trump expressed hopes oil production is left unchanged.
Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!
— Donald J. Trump (@realDonaldTrump) December 5, 2018
Incidentally, it was the U.S. move to exempt some buyers from the sanctions imposed on Iran that brought more crude oil online, sending prices into a downward spiral.
The focus now shifts to Friday's meeting of OPEC members with non-OPEC oil producers, including Russia. It's believed if Russia agrees to a sizeable cut, OPEC would follow suit, Bloomberg reports.
OPEC might finally agree for a cut that would put a floor on prices or even help a modest recovery but not enough to send oil prices through the roof, the Wall Street Journal said, citing Sadad al-Husseini, a former Saudi Arabian Oil Company executive.
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