Oil prices have slipped as stock markets tumble due to weak global financial markets.
The reduction in prices comes ahead of the OPEC-led meeting in Vienna, Austria, where production cuts are expected to be announced to address excess supplies.
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Brent crude oil futures, the international benchmark for crude prices, decreased 21 cents, or 0.3%, to reach $61.35 a barrel, while US West Texas Intermediate (WTI) crude futures fell 28 cents, or 0.5%, to stand at $53.17, Reuters reported.
Traders suggest that unstable global financial markets affected oil prices.
In a Global Outlook report published on 6 December, Barclays stated that ‘investors need to lower their expectations’ and that ‘2019 should be a period of lower returns and higher volatility’.
The bank added that the global economy is likely to experience a slowdown over the next several quarters. Global economic slowdown reduces fuel demand.
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By GlobalDataA supply glut has also influenced oil markets, reducing prices by 30% since early October when both benchmarks reached four-year highs.
The producer cartel is expected to agree for a supply cut of up to 1.4 million barrels per day (Mbpd).
OPEC’s crude oil production has increased by 4.1% to 33.31Mbpd since mid-2018. Saudi Arabia, the de facto leader of the group, is a chief contributor to the growth in output.
Since the end of last year, output volumes from OPEC, Russia and the US rose by 3.3Mbpd to 56.38Mbpd.
