An OPEC meeting, at which the members will consider how to arrest a decline in oil prices, will be held after the leaders of top global oil producers — Russian President Vladimir Putin, Saudi Crown Prince Mohammed bin Salman and Trump — travel to Argentina for a G20 summit this week. Saudi Arabia is expected to refrain from production cuts, an industry source told Reuters on Monday.
The source said that Saudi crude oil production hit 11.1-11.3 million barrels per day (BPD) in November, although the exact average daily output will be clear only after the month ends.
The levels to which Saudi Arabia has increased production are 0.5 million BPD — equal to 0.5 percent of global demand — from October and more than one million BPD higher than in early 2018, when OPEC members were curtailing production. OPEC and Russia agreed to cut production for the first time since 2016, although Russia has raised production steeply in recent months to a post-Soviet high of 11.4 million BPD.
Analysts at Goldman Sachs, one of the most active banks in commodities, said the G20 meeting could be a catalyst for prices to rebound, noting that they 'expect an OPEC cut and its announcement to lead to a recovery in [Brent] prices'.
The US, which is not an OPEC member state and has not participated in the output reductions, has repeatedly called on OPEC to refrain from cuts. Trump, who has maintained his support for Saudi Crown Prince Mohammed bin Salman despite calls from many US politicians to impose sanctions on Riyadh over the killing of Washington Post columnist Jamal Khashoggi last month, has requested numerous times that Saudi Arabia keep oil prices lower. According to sources cited by Reuters, the crown prince wishes to avoid confrontation with Washington, including on oil prices.
On Sunday, Trump complimented himself and took credit for lowering oil prices, comparing them to a tax cut for the US economy.
So great that oil prices are falling (thank you President T). Add that, which is like a big Tax Cut, to our other good Economic news. Inflation down (are you listening Fed)!— Donald J. Trump (@realDonaldTrump) November 25, 2018
Riyadh agreed to raise its oil output steeply in June in response to calls from consumers, including the United States and India, to help cool oil prices and address supply shortages after Washington reimposed sanctions on Iran, the third-largest OPEC oil producer.