Oil Prices Mixed as OPEC Signals Return of Output Cut Next Year

Investing.com – Oil prices were mixed on Thursday morning in Asia following reports that the Organization of the Petroleum Exporting Countries (OPEC) has signalled it might consider cutting output in 2019 to prevent a return of global oversupply, Reuters reported citing two OPEC sources.

“OPEC and Russia may use cuts to support $70 per barrel,” said Ole Hansen, head of commodity strategy at Saxo Bank.

“The introduction of U.S. sanctions earlier this week against Iran failed to lift the market given the announcement that eight countries, including three of the world’s biggest importers, would receive waivers to carry on buying Iranian crude for up to six months,” Hansen said.

for December delivery gained 0.08% to $61.72 per barrel at 9:29 PM ET (02:29 GMT) on the New York Mercantile Exchange, while for January 2019 delivery edged down 0.06% to $72.03 a barrel on London’s Intercontinental Exchange.

U.S. President Donald Trump said at a news conference on Wednesday that a fragile oil market was a key reason he decided to grant waivers to eight nations, including China, India, and Turkey, to allow them to continue buying Iranian oil.

“I don’t want to drive oil prices up to $100 a barrel or $150 a barrel,” Trump said. “You have a monopoly called OPEC and I don’t like – wait – I don’t like that monopoly, I don’t like it.”

The waivers are expected to last 180 days, though they can be extended, according to reports earlier this week.

Meanwhile, the Energy Information Administration (EIA) reported that U.S. crude inventories rose by 5.8 million barrels in the week ending Nov. 2, to 431.79 million barrels. The EIA added that output is expected to break through 12 million bpd by mid-2019.

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