Oil plunges to 7-week low; Lowest of the year

"Although most analysts claim that this has to do with supply overhang and increased production from Russian Federation and Saudi Arabia, the bottom line is that the U.S. president keeps pushing for lower prices", said Fiona Cincotta, senior market analyst at City Index trading group.

But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses.

Furthermore, the United States waived off such sanctions on November 3 for eight countries, including India and other major importers of oil from Iran.

Brent for January settlement fell $US3.10, or 5 per cent, to $US59.50 a barrel at 12:45 pm in NY, according to data from the London-based ICE Futures Europe exchange.

West Texas Intermediate for January delivery lost 6.9 per cent from Wednesday's close to US$50.88 a barrel on the New York Mercantile Exchange.

The WTI futures contract, the NY commodities markets' benchmark, plunged more almost 7% on the day, while its European counterpart, Brent Crude, dropped close to 5%. During the session, the benchmark dropped to US$58.41, the lowest since October 2017. "Therefore, if the Opec and its allies decide to hold their supply, oil prices are likely to rebound", it said.

Falih pinned the anticipated drop in demand on the Trump administration allowing some of Iran's biggest customers to continue buying that nation's crude despite USA sanctions on the Islamic Republic. Thank you to Saudi Arabia, but let's go lower! "How much longer (are) bears are able to keep firing?" That is an increase of half a million bpd when compared to the group's forecast from six months ago.

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The organisation hiked its estimate of non-Opec supply growth by 90,000 barrels per day from its last report, to 2.3m barrels a day in 2018, and up by 120,000 barrels a day next year.

Analysts at Morgan Stanley believe there are "compelling arguments" on either side when it comes to the OPEC alliance considering whether to implement production cuts from December 6.

Oil production has surged this year.

However, on balance, analysts at the firm said in a research note published Friday that the chance of supply cuts were around "2-in-3". "On the other hand, in the 1-in-3 probability that OPEC does not come to an agreement, there is still downside to Brent prices, although probably not much below the high-$50s in the next few months".

"The declining trend was reversed again when Brent crude oil prices increased on November 12 on an announcement by Saudi Arabia that it would cut its exports by 500,000 barrels per day in December, and speculations that the Opec will slash output in 2019". Trade tension between America and China is raising concerns over demand and Trump renewed a call for lower oil prices.

The group relaxed this strategy in June, but in September, some of the world's leading oil producers were talking about pumping extra oil onto the market in order to help soothe intensifying supply shock fears.

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