Gold Silver Reports (GSR) – Crude Oil dropped as investors weighed up the effectiveness of a potential cut in supply from OPEC and possibly other exporters in the face of rapidly rising global output.
The Organisation of the Petroleum Exporting Countries (OPEC), de facto led by Saudi Arabia, is pushing for the producer cartel and its allies to cut 1 million to 1.4 million barrels per day (bpd) of supply to adjust for a slowdown in demand growth and prevent oversupply.
Russian Energy Minister Alexander Novak said that Russia, which is not an OPEC member, planned to sign a partnership agreement with the group, and that details would be discussed at OPEC’s Dec. 6 meeting in Vienna.
The French bank said this was due to “sizeable” losses in Iranian exports expected because of U.S. sanctions against Tehran and because of risks of disruptions in Venezuela and also Libya and Nigeria.
Despite the gains, crude prices remain almost a quarter below their recent peaks in early October, weighed down by surging supply and a slowdown in demand growth.
This comes as supply in the United States is surging, with crude oil production up by almost a quarter this year, to a record 11.7 million bpd.
