Trump tweet snuffs oil rally as OPEC and markets warn of oversupply

Representatives from here major oil producers met in Abu Dhabi at the weekend

Representatives from here major oil producers met in Abu Dhabi at the weekend

Oil's slide accelerated on Tuesday (Nov 13), with USA futures suffering their steepest one-day loss in more than three years due to ongoing worries about weakening global demand and oversupply.

Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil - US Crude-bearish contrarian trading bias.

Oil prices started retreating on Tuesday after US President Donald Trump flayed Saudi Arabia's call for production cuts and pressed oil cartel OPEC for lower prices based on supply.

Both crude benchmarks have fallen more than 20 per cent since peaking at four-year highs in early October.

The Organization of the Petroleum Exporting Countries (OPEC) has been watching the jump in supply and price slump with concern.

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.

"Trump's message was meant to keep OPEC in check" after the group signaled they may agree to cut production, Makiko Tsugata, a senior analyst at Mizuho Securities Co., said by phone from Tokyo.

Is this basketball’s dirtiest-ever cheap shot?
Tenaglia is then seen writhing in pain, video shows. "We trust that they will handle it appropriately", he said. In addition, the case is under review by Fitchburg State for consideration of further sanctions.

Anxious by a drop in oil prices and rising supplies, OPEC is talking again of reducing production just months after increasing it. Money managers' combined bullish positions in WTI and Brent sank to the lowest in 14 months as of November 6, Commodity Futures Trading Commission data show, as long positions shrank and shorts increased.

Even as the Saudis have promised to reduce output, United States production reached 11.6 million bpd in the most recent week, a new record. The IEA estimates total USA oil supply will rise by 2.1 million bpd this year and another 1.3 million bpd in 2019, from a current record of more than 11 million bpd.

Opec is meeting on December 6 and is expected to decide then whether to carry on the production cuts.

A total cut was estimated at total of 1.8 million barrels per day, while non-OPEC states pledged to jointly reduce oil output by 558,000 barrels per day, with Russian Federation pledging to cut production by 300,000 barrels.

Oil began to climb Monday when Saudi Arabia said that it would boost prices.

The U.S. has meanwhile allowed some of its allies - Greece, India, Italy, Japan, South Korea, Taiwan and Turkey - as well as rival China to continue to purchase Iranian oil despite re-imposed sanctions, as long as they work to reduce their imports to zero. With a trade war between the USA and China stoking concerns over the global economy, investors are watching if the Organization of Petroleum Exporting Countries and its allies will pump less.

Latest News