Non-OPEC Oil Output Soars Despite Price Slide

  • Non-OPEC Oil Output Soars Despite Price Slide

Non-OPEC Oil Output Soars Despite Price Slide

Saudi Arabia's Oil Minister Khalid al-Falih announced on Monday that the kingdom would cut oil production despite warnings from President Donald Trump. The decline in prices continued last week after the USA said it would let eight countries keep importing Iranian oil. More than 830,000 contracts had changed hands as of 1:45 p.m. EST (1845 GMT), as funds shed positions with oil dropping to December 2017 lows. Phil Flynn, senior market analyst at Price Futures Group told the news site that the spat between Trump and OPEC was causing tensions in the global market. "It's getting to the point where it doesn't seem to be about fundamentals anymore, but a total collapse in price".

Shares in Apple fell "after it was reported that a supplier was asked to materially reduce shipment for iPhone parts", a Schwab Market Update said.

Led by top exporter Saudi Arabia, OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.

USA crude oil futures were getting hammered Tuesday, with West Texas Intermediate (WTI) crude oil down nearly 5 percent in afternoon trading.

The euro struck a 17-month low at $1.1240 before recovering slightly after it was hit by Brexit clouds that weighed on the pound as well.

Brent ended down US$4.65, or 6.6 per cent, to US$65.47 a barrel, the largest one-day loss since July.

Brent Crude has now fallen over 25% since hitting a four-year high in early October, while United States oil has lost 28% since its October peak. It now sits at levels not seen since March. Output, however, rose by 127,000 bpd to 32.9 million bpd, Opec said.

"Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market", OPEC said in the report.

"They can't make up their minds on a cutback or not", said Bob Yawger, director of energy futures at Mizuho.

But OPEC followed that up with a monthly report on the state of the oil market showing another cut to its demand forecasts - the fourth in a row. Yawger noted that the potential pullback in Saudi output has in part already been made up by the sharp bump in US production, which reached 11.6 million bpd in the most recent week, a new record. "These unusual bedfellows no longer seem like they're in the same bed anymore".