Oil Prices Slip Amid Growing Worries of Oversupply; OPEC Meetings In Focus

Investing.com – Oil prices slipped on Tuesday in Asia and traded near their lowest levels in more than a year amid growing concerns of an oversupply in the market.

for January delivery edged down 0.4% to $51.41 a barrel at 12:33 AM ET (05:33 GMT) on the New York Mercantile Exchange, while for February delivery also slipped 0.3% to $60.41 per barrel on London’s Intercontinental Exchange.

Citing an industry source, Reuters reported that Saudi Arabia raised oil production to an all-time high in November and pumped around 11.1-11.3 million barrels per day.

Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies are set to meet in Austria next week, and they’re expected to announce that output will be reduced.

This week’s G20 summit is another major focus for market watchers, who will see if U.S. President Donald Trump and his Chinese counterpart Xi Jinping can de-escalate the U.S.-China trade war.

In recent months, Trump has put pressure on his political ally Saudi Arabia, OPEC’s de-facto leader, not to cut production.

On Monday, Jones reported that Saudi Arabia and OPEC planned to announce an extension of current cuts and quotas from 2016 into 2019, then working to “over comply” to erase out the glut in supply. The group hopes that such “clandestine” cuts will keep the president from tweeting that there should be no reduction in supplies.

“It will be still a big cut but less pronounced,” a senior Saudi oil advisor told Dow Jones. OPEC had floated a 1.4 million bpd cut before Trump started pushing back.

“Oil is on a slippery slope,” said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.

Ruecker said the weak sentiment “follows a surprisingly swift and pronounced change in the market mood from shortage fears to glut concerns,” while the world economy was also slowing down.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.