Global oil market to lapse into surplus in 2019

But since May, Opec+ have ramped up output while at the same time the United States continued to grow its oil production, which reached a record of 11.6 million bpd earlier this month.

Brent crude settled up 65 cents, or 1 percent, at $66.12 a barrel, after hitting a session high of $67.63.

OPEC - led by Saudi Arabia - along with Russian Federation have been burned by previous decisions to refuse production cuts.

"This tweet certainly did not help prices", ING commodities strategist Warren Patterson said.

However, President Trump is pressuring Opec not to cut supply in order to prop up prices. The group's strategy is to lower oil inventories to their five-year average.

In its monthly report, Opec said world oil demand in 2019 would rise by 1.29 million barrels per day (bpd), 70,000 bpd less than predicted last month and the fourth consecutive forecast cut.

It added: "Non-OPEC oil supply growth in 2018 is estimated at 2.31 mb/d, an upward revision of 0.09 mb/d from the previous month's assessment".

"We are talking about a cut from everyone, including Nigeria and Libya because their production has exceeded the cap in recent months", one source said. OPEC and its partners, meanwhile, are said to be considering a bigger-than-anticipated cut in production.

Crude in the USA dipped below US$55 a barrel this week for the first time in a year amid renewed fears of a glut, with domestic production at record-highs, rising OPEC output and waivers meant to ease the impact of sanctions against Iran.

The report by the International Energy Agency also showed that the countries of the Organization of the Petroleum Exporting Countries (OPEC) were 105-per cent compliant with the deal on oil output freeze in October.

OPEC is comprised of most of the world's top oil producers, meaning its decisions about production sway the prices of gas across the planet.

Iranian oil industry has been under pressure from the US efforts to isolate the country by reimposing sanctions.

Since early October, oil prices have lost around a quarter of their value as supply soars just as demand is expected to slow down along with an economic downturn.

The Opec+ alliance may cut its output by up to a million bpd next year, if needed, to balance the market, Saudi Oil Minister Khalid Al Falih said this week. Vagit Alekperov, CEO at Russia's second-biggest oil producer Lukoil, said this week that he doesn't see any need of cuts in 2019.

On Tuesday, U.S. futures marked their steepest one-day loss in more than three years due to ongoing worries about weakening global demand and oversupply.

  • Eleanor Harrison