Oil price TUMBLES: Crude falls as concern grows over weakening U.S. demand

Oil price TUMBLES: Crude falls as concern grows over weakening U.S. demand

Just months earlier, they had relaxed production caps as prices shot higher on market worries about the impact of United States sanctions on Iran, but Washington eventually granted waivers allowing several countries to continue to import Iranian oil.

American crude output is poised to expand by 1.1 million barrels a day this year, according to the IEA, which sees the US exceeding the Saudis' maximum level within the next six months.

"It's going to send a signal to the market that they're serious", said Phil Flynn, an analyst at Price Futures Group in Chicago.

"This stoked fears of weak demand in the USA". "The perception of diminished demand which was turning up in the economic numbers is turning around, and that's going to bring the speculators back".

But in the short term, OPEC's strong efforts is a strong positive for the oil prices to stabilize.

Brent for March settlement advanced 2.5% to close at $62.70 the London-based ICE Futures Europe exchange The global benchmark crude traded at an $8.66 premium to WTI for March.

OPEC says its December output fell by 751,000 barrels per day (bpd) to 31.58 mbpd.

After closing out 2018 in free-fall amid fears of a global supply glut and economic slowdown, USA crude prices have rebounded more than 18 percent to start this year. Schlumberger Ltd. offered more reassuring news for those anxious about a glut of U.S. crude.

Currently, Saudi Arabia could raise production all the way up to its maximum capacity of 12 million barrels a day. It's the biggest cut since the organization kicked off a previous round of curbs in early 2017.

World oil markets have been on a rollercoaster ride in recent months, with OPEC and its partners including Russian Federation, often called OPEC+, agreeing to cut back production again from January in order to reverse a slump in oil prices on abundant production and worries about slower global growth.

Prices are likely to keep climbing at least until April, she said, when the USA is due to decide whether to extend waivers against sanctions for buyers of Iranian oil.

This story has been published from a wire agency feed without modifications to the text.

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