Published: Wed, November 14, 2018
Money | By Arnold Ball

Trump urges Saudi Arabia, OPEC not to cut oil production

Trump urges Saudi Arabia, OPEC not to cut oil production

That confounded a market that was anticipating stricter enforcement and a more significant reduction in Iranian exports.

"Prices have been falling amid a continued rise in crude supplies from big producers, such as Saudi Arabia, Russia and the U.S., more than compensating for lost Iranian barrels", analyst Fawad Razaqzada told AFP.

Saudi Arabia's energy minister on Monday called for a global output cut of one million barrels per day to re-balance the market, as Riyadh unveiled plans to trim its own production by 500,000 bpd from December.

Other oil-market news Gasoline futures rose 1.5% to settle at US$1.6367 a gallon.

But the market has turned bearish in the past three weeks due to the U.S. issuing sanction waivers for eight countries importing Iranian crude, record American production and forecasts of slowing demand.

"A new strategy needs to be formed. whether it is a cut in production or something else, but it will not be an increase in production", he said. "So far I don't see any necessity for this".

Malaysia is an oil producing nation but is not part of the 15-member Opec which controls over 80 per cent of the global oil output and its prices.

Oil's slide accelerated on Tuesday, with US futures suffering their steepest one-day loss in more than three years due to ongoing worries about weakening global demand and oversupply. OPEC members may be weighing oil production cuts again, anxious that a slowing global economy will undermine prices, but in the group's Middle East heartland producers are spending billions to add output capacity for the long term. They say they are considering production cuts.

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Oil prices have shed a fifth of their value in one month since surging to a four-year high in early October.

Oil producers will continue to evaluate the market data prior to the Vienna summit, "but if we need to trim production by one million bpd, we will do", Falih added.

Root added that commodity prices that are influenced by cartels such as OPEC, which controls almost a third of global oil production, do not necessarily rise and fall with economic cycles.

Trump tweeted, "Hopefully, Saudi Arabia and OPEC will not be cutting oil production".

Last week, higher United States energy stockpiles drove WTI crude to its longest losing streak in more than 30 years, while Brent Crude dropped below Dollars 70 a barrel for the first time since April. At the time the kingdom flooded the market with excess oil in a bid to drown out high-cost producers, including shale companies in the United States. The administration had been counting on Saudi Arabia to ensure oil supply to prevent a run-up in prices.

The Russian and USA presidents met briefly at a lunch Sunday in Paris, where Saudi Arabian issues were discussed, according to White House press secretary Sarah Sanders.

An official from group member Kuwait said on Monday major oil exporters had over the weekend "discussed a proposal for some kind of cut in (crude) supply next year", although the official did not provide any detail.

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