Global oil supply jumps, sending prices lower

Oil prices have lost a fifth of their value over the past month

Oil prices have lost a fifth of their value over the past month

American shale fields have pushed US oil production to all-time highs this year with crude output now at 11.6 million bpd, helping make the United States self-sufficient in energy. America's increasing inventories suggests "the nation's crude exports could become more active, resulting in excess global supplies".

Oil markets slipped again on Wednesday, extending losses from a 7% plunge the previous session as surging supply and the spectre of faltering demand scared off investors.

"This will, in our view, cap any upside above $85 per barrel (for oil prices)", said Jon Andersson, head of commodities at Vontobel Asset Management.

The 14-member Opec expects oil supply from its rivals to outpace its own output next year.

Brent for January settlement fell 24 cents to $66.36 a barrel on the London-based ICE Futures Europe exchange.

The producers will take whatever steps are necessary to keep the market stable and keep crude inventory levels where they are, Mr Al Mazrouei said.

The OPEC-led deal got rid of a supply glut that built up in 2014 as supply from the United States and other countries outside the group soared.

Saudi Arabia's Oil Minister Khalid al-Falih announced on Monday that the kingdom would cut oil production despite warnings from President Donald Trump. One aspect that might be in play is the amount of Non-Opec oil production with U.S. shale production increasing to record levels for next year.

According to the report, OPEC crude output went up to 32.99 million barrels per day in October, "up 240 kb/d on a year ago".

OPEC and its allies are mulling on cutting crude oil production by 1.4 million barrels per day in 2019 to bolster oil prices, according to media reports.

Oil prices hit its lowest point since December 2017 on Tuesday, following anticipated oversupply in the global crude oil market.

In addition to Trump's tweet, the price of oil has come under pressure because of fears that weakening economies outside of the US could diminish demand.

"The market has cratered over the last few weeks and the pop today is related to the chatter that producers could cut up to 1.4 million bpd in 2019", said Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut.

"The head fake on Iranian sanctions, which turned out to be misleading when US actions were limp, combined with putting more pressure on producers helped create the oversupply in the market", Morse said. Russian Energy Minister Alexander Novak said on Wednesday no emergency action was warranted to stem the decline in prices.

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