Oil crashes to its lowest level of 2018 despite Saudi Arabia's proposed production cut

  • Brent crude has hit its lowest price since October 2017.
  • It was trading around $US58.80 as of noon ET on Friday. Oil had briefly touched $US86 a barrel last month before dropping dramatically in the past few weeks.
  • OPEC is set to meet on December 6 to discuss supply concerns. Weaker global growth and an oil glut are depressing prices.
  • Follow Brent’s price throughout the day at Markets Insider.

Brent crude is staying lower for longer.

Oil markets continued to drop Friday as persistent concerns about a global oil glut were exacerbated by weaker economic conditions.

Brent was down 4.9% as of 9:10 a.m. ET, having previously dropped below $US60 a barrel – its lowest levels since October 2017 – despite news that Saudi Arabia was willing to cut production. It was trading around $US58.80 as of noon ET on Friday.

Oil briefly touched $US86 a barrel last month before dropping dramatically in the past few weeks.

“We will not sell oil that customers don’t need,” Khalid Al-Falih, the Saudi energy minister, said.

Supply concerns are expected to lead to OPEC cutting production at a summit on December 6, with prices still stuck in a bearish position.

Volatility is also high in energy markets with West Texas Intermediate (WTI) and crude reaching levels not seen since the 2014-16 market slump and before the financial crisis of 2008, according to Reuters.

The record production from the US and inventories at their highest levels since last December have weighed on prices despite President Donald Trump’s renewed sanctions on Iran. Concerns that global economic growth may slow have also led to weakening demand.

“The market is currently oversupplied,” a recent note from the US investment bank Jefferies Group said.

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