Energy agency: Global oil supply jumps, sending prices lower

Will Gas Prices Go Up? Saudi Arabia to Cut Production

Will Gas Prices Go Up? Saudi Arabia to Cut Production

In its monthly report, Opec said world oil demand in 2019 would rise by 1.29 million barrels per day (bpd), 70,000 bpd less than predicted last month and the fourth consecutive forecast cut.

United States bank Morgan Stanley said in a note on Wednesday that China's economic "conditions deteriorated materially" in the third quarter of 2018, while analysts at Capital Economics said China's "near-term economic outlook still remains downbeat". "It remains to be seen whether OPEC will agree" on cuts, Tsugata said.

Previously, the OPEC and several oil producers outside the cartel agreed to cut oil output in an effort to stabilize global oil prices in 2016.

But when President Donald Trump imposed sanctions November 5, he issued six-month waivers for some of Iran's biggest oil customers.

Prices fell further on Monday when Donald Trump urged the Organisation of the Petroleum Exporting Countries (OPEC) not to cut supply to prop up falling prices.

Inventories in developed nations have increased for four straight months.

West Texas Intermediate for December delivery declined as much as $1.08 to $58.85 a barrel on the New York Mercantile Exchange and traded at $59.20 at 4:59 p.m.in Tokyo.

Brent crude, the European benchmark, was trading just above $65 a barrel while U.S. crude futures stood just below $56 - its lowest mark for 12 months. The contract fell 26 cents to $59.93 on Monday, the lowest close since February 13. The global benchmark crude was at a $9.88 premium to WTI for the same month.

Anxious by a drop in oil prices due to record supply from Saudi Arabia, Russia and the United States, the Organization of the Petroleum Exporting Countries is talking of a U-turn just months after increasing production.

Most analysts expect USA output to climb above 12 million bpd in the first half of 2019.

OPEC member Iran, as well as Russian Federation, would need to be brought on board for the new plan, the sources added.

Once the oil industry's star product, gasoline is now losing oil refineries money in Europe and has plunged in value against diesel, its main competitor.

Al-Falih, who on Sunday said the kingdom would cut production by over 500,000 barrels per day in December, said Monday that Saudi Arabia had been giving customers "100 percent of what they asked for".

The meeting in Abu Dhabi over the weekend raised the odds of an output cut next month to "fairly high", and the reduction may be in the 1 million-barrels-a-day range, according to RBC Capital Markets. The surge in USA production is contributing to rising stockpiles. Official storage data is due on Thursday from the EIA, with analysts expecting a 3 million barrel rise in crude inventories.

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