Brent crude prices have declined by around 1% to less than $70 per barrel after US President Donald Trump asked OPEC not to reduce production to stabilise the market.
International benchmark Brent crude oil futures decreased by 71 cents, or 1%, to trade at $69.41 a barrel, while US West Texas Intermediate (WTI) futures dropped 70 cents, or 1.2%, to reach $59.22, Reuters reported.
Another reason that contributed to the decrease in oil prices was the rising US dollar, which is at its highest level in 16 months. The strong dollar tends to affect imports as countries using currencies other than the US dollar have to pay more.
Brent and WTI futures have posted losses of more than 20% since early last month.
Bank of America Merrill Lynch was quoted by the news agency as saying: “Sky-high production in the US, coupled with incremental barrels coming from Saudi Arabia and Russia, is starting to impact oil market balances. As such, crude oil inventories are starting to increase once again.”
The bank also stated that the US crude production is set to break through the 12 million barrels per day (Mbpd) mark next year. The US is currently producing 11.6Mbpd.
Kazakhstan also reported a 4.8% rise in its oil production to 74.5 million tonnes in the first ten months of this year, which is the equivalent to 1.82Mbpd.
Meanwhile, Saudi Arabia is concerned about the potential impact of the supply-demand situation on oil prices.
On 12 November, Saudi Energy Minister Khalid al-Falih disclosed that the Organization of the Petroleum Exporting Countries (OPEC) members agreed to the need to prevent oversupply in the market.
The producers intend to cut crude oil supply next year by around 1Mbpd from October levels.
On the social networking platform Twitter, Trump wrote: “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!”