Oil prices rose by about one percent on Monday after top exporter Saudi Arabia announced a cut in supply for December, seen as a measure to halt a market slump that had seen crude decline by 20 percent since early October.
Oil prices are staging a comeback, driving Brent crude oil above $70 following an announcement from the kingdom of Saudi Arabia indicating that the world's major crude producers plan to cut supply significantly in 2019.
"Prices have been falling amid a continued rise in crude supplies from big producers, such as Saudi Arabia, Russia and the USA, more than compensating for lost Iranian barrels", Forex.com analyst Fawad Razaqzada told AFP before the meeting.
Last week, the U.S. Energy Information Administration released a report that revealed U.S. oil production increased by as much as 400,000 barrels a day to a record 11.6 million barrels a day for the week ended November 2.
However, at the global level, it will be a new blow to consumers, who will have to pay more for gasoline, and will increase transport expenses of the companies.
Oil prices have shed a fifth of their value in one month since surging to a four-year high in early October.
Global appetite for the group's crude will be about 31.5 million barrels a day next year, OPEC said.
Northern California Wildfire Destroys Hundreds of Buildings
Smoke from the wind-driven fire, which started Thursday morning, can be seen from as far away as 150 miles. Flames and cinders crawled along the ground and up trees as she, her mother and grandmother fled the area.
A meeting between Novak, Al-Falih and other producers on Sunday yielded no formal change in supply policy, but did acknowledge they may need "new strategies".
Last week, higher U.S. energy stockpiles drove WTI crude to its longest losing streak in more than 30 years, while Brent crude dropped below $70 a barrel for the first time since April. They fell below the 60-dollar mark. "I think those reports are going to be even weaker because they will have to adjust for the increase in us production", Jakob said.
Besides, output from the Organization of the Petroleum Exporting Countries like Saudi Arabia, the UAE, Iraq and Libya has been on the rise in recent months.
He added that the production increase seen from May, where Opec+, as the alliance is called, added over a million bpd back into the markets had "achieved a purpose" as a three-digit price level would have been "very, very uncomfortable", he added. This is necessary because OPEC members like Nigeria need crude prices to remain high for obvious reasons, one of which being the fact that there are budgets to be financed.
Crude oil prices attempted to rebound on Monday, rising in the morning after Saudi Arabia signaled production cuts. That hasn't helped oil majors Exxon Mobil (XOM) and Chevron (CVX)-they're down 0.5% and 0.9% respectively-while the SPDR S&P Oil & Gas Exploration & Production (XOP) and Energy Select Sector SPDR (XLE), the biggest oil-related exchange-traded funds, are off 1.6% and 1.1%, respectively. Oman's Oil Minister Mohammed Al-Rumhy said "there is a consensus that there is an oversupply and we need to do something".
Hopefully, Saudi Arabia and OPEC will not be cutting oil production.
Traders said a strong United States dollar, which hit a 16-month high on Tuesday, also weighed on crude futures.