Oil prices are re-tumbling this morning after weekend hopes for ‘news’ of production cuts to stabilize prices failed to appear.
“It appears that the market takes a production cut for granted,” PVM Oil Associates analyst Tamas Varga wrote in a report. “We’ll see if it is right after the next OPEC meeting on Dec. 6. It is not unreasonable to anticipate stable prices until then.”
But, Bloomberg reports that Russia held off committing to further output curbs, opening up a gap with Saudi Arabia which has called for supply cuts.
Russia’s Energy Minister Alexander Novak said producers need to “better understand both the current conditions and the winter outlook” before agreeing to a supply cut.
A weak demand outlook, waivers on sanctioned Iranian crude and high U.S. production has pushed oil into a bear market. To counter this, Saudi Arabia has said producers may have to cut output by 1 million barrels a day, but Novak wants them to “make a balanced decision, and so far there are no criteria for it.”
Furthermore, trade tensions between the U.S. and China escalated over the weekend, adding to worries supply may overtake consumption.