Published: Thu, December 06, 2018
Finance | By Loren Pratt

Oil Prices as Stockpiles Rise

Oil Prices as Stockpiles Rise

Oil slipped to about $60 a barrel on Wednesday, pressured by rising USA inventories and doubts over whether an OPEC-led output cut will be agreed next week.

Once a consensus is reached, more countries may come forward towards cutting down on oil production.

"As Saudi Arabia we can not do it alone, we will not do it alone", he told reporters in Abuja where he met his Nigerian counterpart Emmanuel Ibe Kachikwu.

The price of Brent has slumped by more than 30 percent from a four-year high above $86 in early October, pressured by concerns that supply will exceed demand in 2019 as economic growth slows. Moscow also moved in early November to cap wholesale fuel prices to prevent further gasoline price spikes-a highly politically sensitive issue for President Vladimir Putin, who has also enacted an unpopular pension reform to lift retirement age. This will reduce oil supply by 1.4 million barrels per day. This led to added concerns about a global supply glut just before the meeting between two of the world's biggest oil producers, Russian Federation and Saudi Arabia. Articles appear on euronews.com for a limited time. We must be very careful in this respect because every word is important and affects the federal budget revenues.

Analysts believe that despite dubious economic benefits from high oil prices for Moscow, Putin will find the political gain irresistible-further boosting Russia's influence in the Middle East-and will have Russian Federation agree to cuts proposed by Saudi Arabia. This weekend, Putin will hold talks with the crown prince in Buenos Aires on the sidelines of the Group of 20 summit. Putin and Trump are expected to meet there, and so are Putin and MBS.

Russian Energy Minister Alexander Novak met Russian oil producers this week to discuss cooperation with OPEC, two industry sources told Reuters without providing details.


Riyadh, however, is caught between a rock and a hard place.

Meanwhile, the USA decision to reimpose sanctions on Iran, only to grant waivers to major importers of that nation's oil, threw the market for a loop.

"We expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday", U.S. bank Goldman Sachs said in a note to clients.

Such OPEC/non-OPEC announcements are not unusual at all-vague statements stressing on "market stability" are OPEC's specialty.

The price is still set for its biggest one-month fall in November since the depths of the financial crisis in 2008, having lost more than 22 percent so far.

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