Oil struggles to find footing after 7% fall

"I believe a cut of 1.4 million bpd is more reasonable than above it or below it", one of the sources, who declined to be identified by name as the talks are confidential, said.

Brent crude fell by 4.2 per cent to $67.15, touching its lowest since March. The report notes that "the United States remains committed to reducing Iranian oil exports to zero from the 1.8 million barrels per day seen today".

A steep slide in oil prices has surprised many oil market participants. OPEC crude output rose by 200,000 bpd in October to 32.99 million bpd, up 240,000 bpd on a year ago, as losses of 400,000 bpd from Iran and 600,000 bpd from Venezuela were easily offset by increases from others, such as Saudi Arabia or the United Arab Emirates. The group's strategy is to lower oil inventories to their five-year average.

Russian Federation aims to continue cooperation with OPEC to stabilize the oil market, with existing efforts having shown "positive results", Putin said. This in turn has offered a bounce for oil prices with Brent crude jumping 1.4%, potentially establishing a near term bottom. "The products are definitely supporting us right now".

Merrill Lynch says US crude production will break through 12 million bpd in 2019, supporting oil exports to the rest of the world.

Saudi Arabia, a prominent member of the oil cartel, said it would cut exports by as much as 500,000 barrels per day (bpd) in November and December to curb oversupply. During the week-ending November 2, the API reported that USA crude stocks climbed by 7.8 million barrels. Stockpiles in industrialized nations have increased for four consecutive months and are set to jump by 2 million barrels a day next half if current output is maintained, the agency said.

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In addition to Trump's tweet, the price of oil has come under pressure because of fears that weakening economies outside of the USA could diminish demand.

He eschewed a direct response on Wednesday on whether curbs were needed, saying oil prices were adjusting after being hit by initial uncertainty about production in Iran, which later benefited from export waivers from US sanctions.

Earlier in the month the EIA reported that US production reached a record 11.6 million bpd and should hit 12.0 million bpd in early 2019.

Saudi Arabia has shown concern as supply has started to outpace consumption, fearing a repeat of a glut that brought a price crash in 2014. 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.

Since October, the oil price has fallen to below $70 a barrel, its lowest in eight months.

  • Darren Santiago