Oil Prices Mixed; OPEC Vows to Extend Output Cuts

Investing.com – Oil prices were mixed on Thursday morning in Asia, while oil production cartel OPEC and its allies pledged to keep slashing output next year.

for February delivery dropped 1.56% to $47.42 a barrel at 10:51 PM ET (03:51 GMT) on the New York Mercantile Exchange, while for February delivery edged up 0.19% to $56.61 per barrel on London’s Intercontinental Exchange.

OPEC’s de-facto leader Saudi Arabia said the organization, Russia and other oil producers will keep curbing output in 2019 to avoid a global glut, according to Bloomberg.

“We will meet in April and I’m certain that we will extend [the cuts]. We need more time to achieve the result,” the kingdom’s Energy Minister Khalid Al-Falih said.

“What has happened in my opinion recently is a confluence of many non-oil fundamental issues including the geopolitical issues, especially around the sanctions and the waiver that were granted by the U.S. It also includes the trade tension between the U.S. and China.”

Earlier this month, the cartel and its allies agreed to slash output by 1.2 million barrels per day (bpd), but the market remains sceptical if the oil producers will walk the talk.

“Wednesday’s recovery was short-covering. Investors quickly moved their attention to deteriorating fundamentals in the oil markets including more signs of slowing economic growth next year, record production and the lack of confidence with OPEC’s pledge to curb production,” Xi Jiarui, chief oil analyst at consultancy JLC, told Reuters.

Meanwhile, U.S. crude inventories fell 0.5 million barrels as of Dec. 14 from the previous week, but the 441.5 million barrels in stock now is still 7% above the five-year average for mid-December, according to data released from the Energy Information Administration on Wednesday.

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