Brent, WTI Plunge on Record Saudi Output
Oil prices fell on Tuesday, depressed by record Saudi production even as the kingdom tried to persuade other exporters to agree output cuts ahead of an OPEC meeting next week.
Brent crude oil was down 70 cents a barrel at $59.78, still above a 13-month low of $58.41 reached on Friday. US light crude was 75 cents lower at $50.88, CNBC reported.
Saudi Arabia raised oil production to an all-time high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million barrels per day during the month.
Oil prices have lost almost a third of their value since early October, weighed down by an emerging supply overhang and widespread financial market weakness.
“The oil price correction has become a rout of historic proportions,” US investment bank Jefferies said in a note on Tuesday.
“The negative price reaction is as severe as the 2008 financial crisis and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a very over-supplied market,” the bank said.
Norbert Ruecker, head of commodity research at Swiss bank Julius Baer, said oil had buckled after “a surprisingly swift and pronounced change in the market mood from shortage fears to glut concerns” while the world economy was also slowing down.
Traders are now awaiting the outcome of the Group of 20 meeting in Buenos Aires and also the result of a meeting of the Organization of the Petroleum Exporting Countries.
Leaders of the G20, the world’s biggest economies, meet on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing at the top of the agenda.
source: Financial Tribune
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