Oil prices fell on Friday, resulting from the inability of Organisation of Petroleum Exporting Countries, OPEC to announce decision to cut output as it awaits support from non-OPEC heavyweight Russia.
International Brent crude oil futures fell below $60 per barrel early in the session, trading at $59.50 per barrel down 56 cents, or 0.9 per cent from their last close, while the U.S. West Texas Intermediate (WTI) crude futures were at $51.24 per barrel, down 25 cents, or 0.5 percent.
The declines came after crude slumped by almost 3 per cent the previous day, with the OPEC, ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply, instead preparing to debate the matter on Friday.
“OPEC has decided to meet Friday again as Russia remains the sticking point,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.
Analysts still expect some form of supply reduction to be decided.
“We are beginning to witness the outline of the next iteration of production cuts, with OPEC conforming to cut its own production by around 1 million barrels per day, with the cartel lobbying non-OPEC members to contribute more,” Japanese bank MUFG said in a note.
Oil producers have been hit by a 30-per cent plunge in crude prices since October as supply surges just as the demand outlook weakens amid a global economic slowdown.
Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 percent of global consumption.
That increase alone is equivalent to the output of major OPEC producer the United Arab Emirates.
The surge is largely down to soaring U.S. crude oil production, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the world’s biggest oil producer.
As a result, the United States last week exported more crude oil and fuel than it imported for the first time on records going back to 1973, according to data released on Thursday