Traders Continue to Assess Impact of Production Cuts Amid Other Uncertainties

US investment banks see low oil prices despite OPEC cut

US investment banks see low oil prices despite OPEC cut

But traders said crude prices received some support after Libya's National Oil Company (NOC) declared force majeure on exports from the El Sharara oilfield, the country's biggest, which was seized last weekend by a militia group. But amid mounting global uncertainty on everything from trade and monetary policy to politics, that forecast is far from consensus.

The decision to reduce oil production, taken at the end of the OPEC+ meeting, is an important step for the development of the oil market and the oil industry, said Shahbazov, commenting on the decision of the cartel.

Authorities in Azerbaijan agreed to cut domestic production by 20,000 bpd, despite the country not being part of OPEC. Brent crude is down almost 30 percent from its October highs of more than $86.

Crude oil prices jumped Friday after Opec, Russia and several other producers reach an agreement to cut output in 2019 to steady the market.

Whether it's a trade war between the US and China potentially curbing global demand, or doubts about exactly how OPEC will deliver the cuts, below are some of the reasons crude markets are yet to get excited about the production cuts.

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The next OPEC and non-OPEC ministerial meeting is scheduled to convene in Vienna, Austria, in April next year.

Saudi Arabia's oil production bounced from 10.35 million barrels a day in September, to 11.1 million barrels a day and back down again over the last few months, leaving investors less confident in exactly how much OPEC and its allies will produce.

Saudi Arabia will be the country to witness the most significant drop in oil production among OPEC member countries. Iran has been compromised as well as Libya and Venezuela, considering USA sanctions.

US based Capital Economics, meanwhile, sees an average of $63 a barrel over the course of 2019.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $50.98 per barrel, down 2 cents. Saudi Arabia is now the world's largest oil exporter. Import growth stood at 3 percent, the slowest since October 2016. "As a result of that you could see the market getting quite scared", the strategist said. "We expected there will be a slowdown in demand for oil and accordingly made a decision to cut production", Mazrouei said. "With Opec, non-Opec including Russian Federation, we are now talking about 50 million barrels or half the world's production", Mazrouei said.

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