— This is the script of CNBC's news report for China's CCTV on November 13, 2018, Tuesday.
There was a signal from the OPEC meeting at the weekend that the recent downward pressure on oil prices had more or less affected OPEC policy on production. Current prices have erased almost all of this year's gains, making it the longest losing streak on record. As a result, oil prices have come under pressure in recent days making the increasing outputs overlooked by the represents who attended the OPEC ministerial meeting in the United Arab Emirates on this weekend. Instead, there are concerns that supply is outstripping demand and oil price is volatile.
We know that in the past few months, OPEC and Russia have shifted their strategy of jointly cutting production to make up for the shortfall in crude oil supply left by U.S. sanctions against Iran because of the repeated pressure from the United States, Not long ago, Saudi Arabia was producing close to its highest daily output on record, while Russian production climbed to its highest level since the post-soviet era.
This month, the United States formally began imposing energy sanctions on Iran. The United States, however, initially insisted that all countries stop trading energy with Iran, but this month began granting waivers to eight of Iran's trading partners. Such inconsistent rhetoric and tactics have left Iran's crude exports far less affected than expected and have disrupted market expectations. So, in an interview with CNBC on Monday, Saudi energy Minister Ali Al-FALIH hinted at further production controls, saying OPEC would not allow inventories to rise further.
So I think the decisions that came out in Washington with granting the waivers, I think with the volumes starting to show themselves and weekly inventory data, the market flipped from overreacting from one side to overreacting on the other side. But I assure you that we as a group of responsible producers are go to work and work hard to balance the market within a reasonable corridor.
Mr Fail said OPEC needed to reduce supply by 1m barrels a day from October levels and Saudi Arabia will reduce its daily supply by 500,000 in December than it did in November. Then, after FALIH'S statement, the oil price surged. But another criticism from the White House erased all those gains. US President Donald trump attacked OPEC'S potential oil cut again on Monday.
"Hopefully Saudi Arabia and OPEC will not cut production," he tweeted. "Depending on supply, prices should be much lower!"
In overnight trading, WTI light crude oil futures in west Texas eased for the 11th straight day, falling below the key round point of $60 a barrel, and continued to fall this morning, dropping as low as $59 a barrel.
Brent crude also fell below the round - the - dollar mark of $70 a barrel
OPEC and many other forecasters now believe the global oil market could be oversupplied in 2019 as global demand slows.
OPEC'S caution, analysts say, stems part from the unpredictability of Iran's supply and part from Russia's attitude. At present, Russia may have some differences with OPEC on the issue of production cuts, saying it is not ready to reduce production, and it is too early to discuss that now.
We have been participating in this agreement for a year and a half, we are implementing this agreement. And if such a decision is necessary for the market and all the countries are in agreement, I think that Russia will undoubtedly play a part in this. But it's early to talk about this now, we need to look at this question very carefully
For now, OPEC'S strategy remains uncertain, member states and Russia are likely to wait until Iran's supply impact and other variables come into play before taking collective action to support prices, we will keep an eye on this issue.