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Oil Prices Down More Than 1% as Trump Asks OPEC Not to Cut Supply

Published 11/12/2018, 11:47 PM
Oil prices were down 1% on Tuesday
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Investing.com - Oil prices were down 1% on Tuesday on reports that U.S. President Donald Trump asked the Organization of the Petroleum Exporting Countries (OPEC) not to cut supply to drive up crude oil prices.

Crude Oil WTI Futures declined 1.5% to $59.05 a barrel by 12:19 AM ET (05:19 GMT).

Meanwhile, Brent crude, the benchmark for oil prices outside the U.S., was down 1.10%, to $69.37.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!" Trump said in a Twitter post on Monday.

His comments came after Saudi energy minister Khalid al-Falih announced plans on Sunday to cut oil output from December and suggested that other members of OPEC and their non-OPEC allies led by Russia could follow suit.

The kingdom would cut oil supply by 0.5 million barrels per day (bpd) in December due to lower seasonal demand. The cut represents a reduction in global oil supply of about 0.5%, according to reports.

Al-Falih also suggested that there might be a need for OPEC and non-OPEC members to trim supply back by 1 million bpd from October levels.

Oil prices hit nearly four-year highs in October as the market braced for potential shortages ahead of the restoration of sanctions against Iran, the third-largest producer OPEC on Nov. 4.

The sanctions, however, are unlikely to cut as much oil out of the market as initially expected as Washington has granted exemptions to Iran's biggest buyers, which will allow them to continue buying limited amounts of crude for at least another six months.

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