OPEC faces steep challenge to reach oil cut deal

OPEC faces steep challenge to reach oil cut deal

Meanwhile, Saudi Arabia has been under pressure from the U.S to maintain status quo with respect to production, given the latter's stance that current weakness in oil price is justified.

Energy Aspects says communicating a deal properly is imperative because the market is fragile right now.

As of 15:50 GMT, Brent Crude was trading at $63.12 per barrel, up 5.09 percent.

Amid worldwide pressure over the October 2 killing of Jamal Khashoggi in the Saudi consulate in Istanbul, it seemed that MBS needed the support of the White House too much.

Physical markets were taken aback by the U.S. granting waivers on the Iran sanctions to the eight largest importers of Tehran's crude.

In order to put an end to crude oil prices, the organization of oil producing countries has agreed to cut the oil production.

US oil prices were little changed after the EIA data.

U.S. Sen. Lindsey Graham, R-S.C., said he wanted to "sanction the hell out of" the Saudi government. The country had initially pitched for a 100,000 to 150,000-barrel-a-day cut, but subsequently indicated it might agree to a slightly larger reduction, a delegate said earlier. OPEC and Russian output was lower in October than in November.

The surge of USA oil production, which has increased by 2.5 million bpd since early 2016 to 11.7 million bpd, has given OPEC and other oil pumpers more pressure in global market competition.

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On Twitter Wednesday, Trump urged OPEC not to restrict oil flows, but since then has not publicly addressed the market. "The World does not want to see, or need, higher oil prices!" he tweeted.

The Trump administration reimposed wide-reaching economic sanctions on Iran's critical oil industry in November, as well as other sectors of the Iranian economy, including major banks and shipping operations.

Production from the USA has also surprised on the upside, with the U.S. becoming a net exporter of crude and products for the first time in seven decades.

Oil workers adjust a pipe section at the turntable on a derrick during drilling operations in an oilfield.

Iran, Saudi Arabia's geopolitical rival and OPEC's third-largest producer, has suggested it is in favour of deeper cuts - while asking to be exempted from them because of the effects of USA sanctions targeting its oil sector.

While the net balance shows the U.S.is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. OPEC started increasing its crude production from June 2018 on.

The price decline prompted OPEC and its allies to discuss output cuts, and Saudi Energy Minister Khalid al-Falih said on Thursday possible reductions by those involved ranged from 0.5-1.5 million bpd.

"The Prime Minister has said that he is hopeful that OPEC countries take care that whatever they decide will not go against the interests of consuming countries...the Saudi Minister's remarks seem to indicate this", he added.

Mazrouei said that the exemptions mean that the cuts introduced by other member states are "going to be a bit higher than just the average for everyone". Market tension intensified after the arrest of Huawei Technologies's chief financial officer, Meng Wanzhou , in Canada at the request of the U.S.

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