Oil falls after Trump urges OPEC not to cut supply

Oil falls after Trump urges OPEC not to cut supply

The US dollar hovered near 16-month highs, making oil more expensive for importers using other currencies. The same is also the impact when currency exchange rate fluctuates by Re 1 per USA dollar. United States light crude was US$1.00 lower at US$58.93.

Trump in recent weeks demanded the oil cartel increase production to drive down USA gasoline prices. However, I am expected in the December OPEC meeting to be the catalyst to give some relief to the falling Oil market as they announce production cuts.

Brent Crude has now fallen over 25% since hitting a four-year high in early October, while USA oil has lost 28% since its October peak.

Oil prices have fallen sharply to levels not seen for nearly a year as traders see a return of a glut in supplies at a time of falling demand.

Trump appeared to criticize the announcement in a Monday tweet: "Hopefully, Saudi Arabia and OPEC [Organization of the Petroleum Exporting Countries] will not be cutting oil production".


"This tweet certainly did not help prices", ING commodities strategist Warren Patterson said.

Opec now expects world demand to grow 1.29m barrels a day next year, about 70,000 barrels a day lower than last month's forecast. Oil prices have now fallen for 12 consecutive trading sessions. If anything, they are driving prices higher as the United States defends many of their members for very little $'s.

Top crude exporter Saudi Arabia has watched with alarm how supply has started to outpace consumption, fearing a repeat of a glut that brought a price crash in 2014.

Saudi Energy Minister Khalid al-Falih had already said on Monday that Opec had agreed there was a need to cut oil production next year to prevent oversupply.

"It is becoming clearer that as we move closer towards 2019, the market will see a sizeable surplus at least over the first half of 2019", ING said.

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