Oil prices have been dragged lower due to continued worries about the economic outlook globally that could impact oil demand.
Global benchmark Brent crude oil futures fell by 14 cents to $59.28 a barrel, while US West Texas Intermediate (WTI) crude oil futures slipped 10 cents to $53.68 a barrel, reported Reuters.
Meanwhile, Russia again missed its target to reduce oil production last month. Earlier, it agreed to reduce output by 228,000 barrels per day (bpd). Russia failed to meet the target due to a rise in the country’s gas condensate output.
CMC Markets market analyst Margaret Yang was quoted by Reuters as saying: “Weakness in oil price reflected a bearish view of the global energy demand, as the slowdown in manufacturing and trades seemed not to be ending anytime soon.”
In December 2018, the Organization of the Petroleum Exporting Countries (OPEC), Russia and other major oil producers agreed to reduce oil supply by 1.2Mbpd beginning this year.
Negotiations between the oil cartel members Kuwait and Saudi Arabia to restart production from jointly operated fields in the Neutral Zone, which have a capacity of 500,000bpd, could bring more oil to the supply market. Any increase in Neutral Zone production would be compensated by cutting down the supply from other Saudi Arabian and Kuwaiti fields.
During the third quarter of 2019, China’s economic growth slowed to 6% year-on-year, which is recorded as the country’s slowest pace since 1992.
Reuters quoted Phillip Futures analyst Benjamin Lu as saying: “OPEC-led supply curtailment policies though lending support has struggled to boost oil prices as markets fixate over persistent demand-side concerns.”