Amid increased market expectations that the Organization of Petroleum Exporting Countries (OPEC) and top producers from outside the Organization would move to reduce production at the meeting December, as an attempt to find a balance in the market. Oil prices rose during Wednesday trading to recover some of the gains lost in the previous session.
Prices touched the $67 barrier after international reports said OPEC would discuss cutting output to 1.4 million barrels per day.
Global Brent crude futures rose $1.43, to reach $66.89, while the price of US crude oil was up 82 cents at $56.52 a barrel. Oil experts’ analysis shows that global markets have not yet found the right direction, until prices will rise.
Brent prices fell by about 20% in early October due to concerns about oversupply and falling demand, the biggest drop in record prices in 2014. In recent months, markets have been focusing on US sanctions on Iranian oil and production issues in Venezuela, and now the concern is growing even further because of increasing oil supply in the markets.
The International Energy Agency (IEA) noted that oil stocks in the first half of 2019 would reach 2 million bpd. The agency did not make any change in its forecasts for global demand growth for 2018 and 2019 from last month, at 1.3 million barrels. Oil markets are under heavy pressure due to rising global supply from OPEC and major outside producers, as well as heightened concerns about a global economic slowdown.
US crude production is expected to reach record levels of 7.95 million barrels in December. Monthly reports indicate that the large increase in onshore output helped US crude oil production to reach a record 11.7 million barrels per day, making the United States the largest oil producer in the world, ahead of Russia and Saudi Arabia. Most analysts expect US production to exceed 12 million barrels a day in the first half of 2019. This would contribute to an increase in global oil inventories.