As we reach the close of this holiday week, US oil prices are taking another dive. Indeed, on Friday prices of US oil fell 7 percent, sinking even deeper into a bear market that has comparatively raised investor concern. The plummeting oil prices come after a lot of anxiety about oversupply and lower demand, and this has actually sent crude prices down by roughly one-third since its four-year peak last month, which surpassed $76 a barrel. As such, analysts have turned around nearly immediately from fears of crossing the $100 threshold to why the price fell apart so quickly.
Truly, this six-week selloff has been a bit unnerving and now oil bulls hope that OPEC nations and Russia will rescue the market by announcing vast production cuts at next month’s meeting, in Vienna. On the other hand, US President Donald Trump is putting pressure on both Saudi Arabia and OPEC nations to continue output as though the price cash did not happen. And that has sparked yet more concern among traders who are already worried that Trump’s most recent praise of Saudi Arabia is a sign that they will not back a major production cut.
Speaking of Saudi Arabia, the region’s Energy Minister Khalid al Falih said that their output, this month, would definitely surpass October’s production. Last month, Saudi oil reached 10.6 million barrels per day. That number is actually very near to the all-time high but also just below October’s guidance of 10.7 million bpd. In addition, Falih said that November’s output should easily reach 1 million bpd.
As of this week, the Saudis are pumping an industry record of 10.8 – 10.9 million bpd.
Looking specifically at oil futures, the global benchmark Brent Crude is down 5.5 percent on the day, which is a new low of $59 per barrel for the year. Similarly, US oil benchmark West Texas Intermediate crude fell about 7 percent, to $50.53, which is its weakest day since October 12, 2017. More importantly, perhaps, WTI has lost almost 35 percent of its overall value since it hit its peak on October 3 of this year. Overall, US oil prices are down 10 percent.