SINGAPORE (Reuters) – Oil fell to its lowest level in Friday 2018 at an unstable session on the basis of oversupply, amid gloomy economic prospects.
American refinery in Philadelphia.
The decline occurred, despite market expectations, that the Organization of Petroleum Exporting Countries (OPEC) will begin to restrain production after the meeting scheduled for December 6.
Brent crude futures fell to their lowest level since December 2017 at $ 61.52 per barrel, before recovering to $ 61.88 per barrel from 0622.
This level is still down 72 cents, or 1.2 percent, from the previous close.
WTI crude oil futures in the US fell 2.5 percent to $ 53.29 a barrel after it was five cents from its lowest level since October 2017, recorded earlier this week.
In general, the volume of oil supplies to world markets has increased this year. The three largest producers – the United States, Russia and Saudi Arabia – transported more than a third of global consumption of about 100 million barrels per day.
“The market is now full,” said Jefferies, an American investment bank, on Friday, adding that “the flooded market is going through a difficult time in terms of finding the floor (for the price).”
Production growth occurs at a time when demand slows as the global economy slows down.
Oil prices fell by about 30 percent from their peak levels in early October, as global production began to exceed consumption in the fourth quarter of this year at the end of a short supply period that began in the first quarter of 2017, according to Rev. Enekon.
To cope with a drop in demand, Saudi Arabia, the world's largest oil exporter, said on Thursday that it could cut supplies.
Saudi Arabia insists that OPEC cut crude supplies by 1.4 million barrels per day to prevent a supply crisis.
The organization officially meets on December 6 to discuss production policies.
Preparing Islam Yahya for the Arab edition