Oil prices have declined due to a swelling supply glut and signs of a global economic slowdown.
These factors weighed on expectations of an announcement of potential supply cuts by OPEC members at a meeting tomorrow.
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Brent crude oil futures fell 92 cents per barrel, or 1.5%, to reach $61.16, while US West Texas Intermediate (WTI) crude futures slipped 85 cents, or 1.6%, to trade at $52.4 a barrel, Reuters reported.
According to the American Petroleum Institute (API), US crude inventories surged 5.4 million barrels last week to reach 448 million barrels.
This data points to an increasing supply glut in the US crude markets. Saudi Arabia, the world’s biggest crude exporter and de facto OPEC leader, produced a record 11.3 million barrels per day (Mbpd) last month.
At the meeting in Vienna, OPEC members and Russia will discuss supply policy and are expected to enforce production cuts to increase crude prices.
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By GlobalDataOil prices have been impacted by growing concerns of a widespread economic slowdown. The US and China, the world’s two biggest economies, reached a trade truce last week to stop the imposition of additional import duties on each other for a period of 90 days.
The countries will work towards resolving the trade dispute and a positive outcome will help raise global economic outlook.
Unnamed sources told Reuters that Chinese oil trader Unipec is planning to resume US crude shipments to China by next March following the truce.
Meanwhile, Bank of America Merrill Lynch stated in its 2019 economic outlook that ‘most major economies are likely to see decelerating activity’.
The bank, however, added that governments are likely to execute necessary monetary and fiscal stimulus measures to stabilise the economic slowdown.
