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Russia, Saudi agree to renew oil output cuts: Putin

02 December 2018

Peter Kiernan, lead energy analyst at the Economist Intelligence Unit, added, "OPEC is grappling over how to manage the expected weaker fundamentals in the oil market next year, yet the uncertainty about what the group will do at its meeting next week is causing markets to be more anxious".

Global benchmark January Brent crude LCOF9, -1.39% which expired at the end of the session, lost 80 cents, or 1.3%, to $58.71 a barrel.

The confirmation about the effectiveness of the OPEC+ deal, which helped bolster oil prices after the slump that began in 2014, came as Putin said Saturday that Russian Federation and Saudi Arabia had agreed to renew the pact. The contract was little changed from last week's US$50.42 per barrel.

Crude futures made up some ground on Friday after an OPEC advisory committee recommended a 1.3 million-barrel cut to the cartel's daily output.

Friday's price fall has increased the stress over OPEC in front of an awaited meeting between the OPEC and its associates to be held on December 6 in Vienna, where they are expecting to declare the decrease in the oil output for the year 2019.

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Rosenstein is also there, despite having been handpicked by Trump in 2017. Trump forced Sessions to resign earlier this month.

Russia's energy minister Alexander Novak will meet his Saudi counterpart at the G20 summit in Argentina and discuss an oil output reduction in 2019, RIA news agency cited Novak as saying. Tehran threatened to block supplies of oil to the world by shutting the Strait of Hormuz.

Oil prices have been experiencing a steep decline in the past weeks because of an increase in the crude supply of the United States of America.

The oil reserves in the USA increased by 3.6 million barrels in the week to 23 November to 450,49 million barrels, according to the global energy Agency.

"At the heart of the malaise are concerns that OPEC+ will not do enough to address the current oversupply", said Stephen Brennock, analyst at London brokerage PVM Oil. CME Group's OPEC Watch Tool pegs the probability of a “small production cut” at 52%, with expectations for “little or no change” at almost 48%.

Despite hitting its lowest level in over a year earlier in the week, crude oil is showing signs of stabilizing.

Russia, Saudi agree to renew oil output cuts: Putin

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