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SINGAPORE (Reuters) – Oil prices plummeted to 2018 on Friday, in weak but volatile trading conditions, due to worries about a spate of global supply and a gloomy economic outlook. .
PHOTO: A pump jack on a lease owned by Parsley Energy operates at sunset in the Permian Basin near Midland, Texas on August 23, 2018. REUTERS / Nick Oxford / File Photo
Even an expectation that the producer group of the Organization of the Petroleum Exporting Countries (OPEC) would start retaining supplies from 2019 to contain any glut has provided little support, traders said.
The international benchmark on Brent crude oil futures, LCoC1, hit its lowest level since December 2017 at $ 61.52 per barrel, before rising to $ 62.10 at 4:30 am GMT . It was still 50 cents, or 0.8 percent less than their last close.
The US West West Intermediate (WTI) CLc1 crude oil futures contract fell more than 2% to $ 53.35 per barrel, after reaching less than 5 cents from the October 2017 low reached lower week.
During the downturn, Brent and WTI price volatility rose sharply in November to near levels not seen since the 2014-16 market slump and, prior to that, the 2008-09 financial crisis.
(Chart: volatility of oil prices rose – tmsnrt.rs/2PO4r3S)
The divergence between US crude and international crude comes from the fact that supply in North America is obstructing the system and depressing prices, while global markets are a little tighter, partly because of the reduction in Iranian exports attributable to the new US sanctions.
Overall, however, global oil supply has risen sharply this year, with the top three producers in the United States, Russia and Saudi Arabia emitting more than a third of world consumption, which is around 100 million barrels a day.
High output occurs as demand prospects weaken as a result of a global economic downturn.
Oil prices have fallen by about 30% since their last highs in early October, as global production began to exceed consumption in the fourth quarter of this year, ending a period of under-supply that began in the first quarter. of 2017, according to Refinitiv data. Eikon.
Saudi Arabia, the leading exporter of crude oil, adjusted to lower demand and announced Thursday a reduction in its supply.
"We will not sell oil that our customers do not need," Saudi Energy Minister Khalid al-Falih told reporters.
Saudi Arabia urges OPEC to reduce its oil reserves by up to 1.4 million b / d in order to avoid an overabundance of its reserves.
The group officially meets on December 6 to discuss its procurement policy.
US bank Morgan Stanley said it sees "a much greater likelihood that OPEC will reach an agreement to balance the market in 2019," adding that this would likely support oil prices "at 50". US $, at least in the short term.
(Chart: World balance of supply and demand of crude oil – tmsnrt.rs/2PKtzIy
Report by Henning Gloystein; Edited by Sherry Jacob-Phillips and Richard Pullin
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