Oil prices fall after Trump calls on OPEC not to cut supply

Lloyd Doyle
November 14, 2018

This is 90,000 bpd more than what OPEC forecast a month earlier, and will be also helped by higher production in Canada, Russia, and Kazakhstan.

Trump's statement came after top oil exporter Saudi Arabia announced a supply cut in December and other producers considered reductions heading into 2019.

The crash in oil prices appears to be overdetermined. Benchmark US crude fell 78 cents to $59.15 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the European benchmark, was trading just above $65 a barrel while United States crude futures stood just below $56 - its lowest mark for 12 months. "Oil prices should be much lower based on supply!" the president said in a Twitter post on Monday.

Merrill Lynch says United States crude production will break through 12 million bpd in 2019, supporting oil exports to the rest of the world.

Rising output in U.S. shale oil has also taken its toll. That eased fears that new USA sanctions on Iran would cause shortages and drive prices higher.

Saudi Energy Minister Khalid al-Falih had already said on Monday that Opec had agreed there was a need to cut oil production next year to prevent oversupply.

Every dollar per barrel change in crude oil prices impacts the import bill by Rs 823 crore ($0.13 billion). Saudi Arabia is the largest crude oil producer within OPEC, although the USA and Russian Federation now produce more oil than the kingdom. The same is also the impact when currency exchange rate fluctuates by Re 1 per U.S. dollar.

Extraction from American shale fields over the last decade has propelled U.S. oil production to record highs this year with crude output now at 11.6 million barrels per day (bpd), helping make the United States self-sufficient in energy.

Other reports by Iphone Fresh

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