Russian Federation and Saudi Arabia Will Extend OPEC+ Oil Pact

Russian Federation and Saudi Arabia Will Extend OPEC+ Oil Pact

Saudi Arabia led suppliers to cut production two years ago to curb a glut, then reversed course in June on concerns that US sanctions on Iran could create a shortage. "Now the Saudis are seeking a very broad agreement where everyone accepts some cuts", said Olivier Jakob, managing director at consultant Petromatrix GmbH in Zug, Switzerland. Last Wednesday, the market took a further hit when Khalid al-Falih, the Energy Minister of the Kingdom of Saudi Arabia, said that his country would not reduce its output alone in order to stabilise the market.

Oil prices rose slightly on Friday amid expectations of reduction of oil production and its supplies to world markets participants group OPEC+.

Fears that the United States sanctions on Iran would send oil prices to the roof and precipitate a global economic crisis have disappeared, and the 175th Ordinary Meeting of OPEC in Vienna is expected to be worrying instead about a supply glut that has sent prices crashing.

The focus now shifts to a meeting by OPEC on December 6.

Prices, however, significantly pared much of their early Friday losses as speculation has grown over a potential production cut by major oil producers, ahead of next week's final meeting of the year for the Organization of the Petroleum Exporting Countries.

Brennock went on to predict that "Against this backdrop, the most likely outcome of next week's OPEC meeting is a fudge: Russian Federation and Saudi Arabia will agree to curb production, but by less than is needed to prevent a supply imbalance in early 2019".

"Markets are expecting for the OPEC+ deal to be renewed, which should be healthy for consumers and producers and the global economy as a whole". "But the details are now what matter - how much will be cut, from when, for how long and, crucially, from what baselines". They've been exempt from the group's cuts agreement and are unlikely to welcome a decision to include them in any new cuts, Petromatrix's Jakob said.

American drillers pumped 11.475 million barrels a day, the U.S. Energy Information Administration said, eclipsing Russian Federation for a second month as the world's biggest producer.

Iraq's state oil marketer received about 600,000 barrels of crude at storage tanks it uses in Turkey, according to agents at the port of Ceyhan where the tanks are located.

"It's a huge week not only for oil markets but capital markets in general", said Stephen Innes, head of Asia-Pacific trade at OANDA. However, WTI prices lost 20.9% in November.

US and Brent crude oil futures jumped in early trading on Sunday after the United States and China came to an agreement on Saturday on trade issues that would put off new tariffs.

That growing belief saw oil prices trim early falls on Friday.