Oil slips on near-record United States production, demand fears

Oil price TUMBLES: Crude falls as concern grows over weakening US demand

U.S. West Texas Intermediate (WTI) crude futures were at $53.70 per barrel, down 0.1 percent, or 4 cents.

Saudi Arabia's crude oil exports jumped by 534,000 bpd month on month in November to 8.24 million bpd-the highest level in years as the Kingdom moved to offset supply losses from Iran with the return of the US sanctions on Tehran's oil industry.

Other oil-market news: OPEC compliance with crude-oil output cuts rose to 163 percent in December, according to Bloomberg calculations from the group's secondary-source data.

After the OPEC + decision on oil production cut was made, Brent crude price dropped by more than $10 to $49.3 per barrel.

Most of the reduction came from Saudi Arabia (470,000 bpd), but there were also substantial cuts from Iran (160,000 bpd) and Libya (170,000 bpd) as a result of USA sanctions and domestic unrest respectively.

"The impact of higher oil prices in 2018 is fading, which will help offset lower economic growth", the Paris-based IEA said in its monthly report.

The Organization of the Petroleum Exporting Countries released a list of oil production cuts by its members and other major producers starting on January 1 2019 to boost confidence in its oil supply reduction pact.

In 2020, the administration expects oil production to increase by 1.7 million b/d because of production growth in the U.S., Canada, Brazil, and Russian Federation, while overall OPEC crude oil production is forecast to remain flat.

Oil headed for a third weekly increase on expectations that production cuts by OPEC and resilient fuel demand will keep global markets in balance.

That said, it's undeniable that crude's performance so far in 2019 is a far cry from the steep price plunges experienced in the closing months of 2018, a point not lost on Bloomberg, which on Friday noted that the commodity hasn't started off this strong since the turn of the century.

Signs from the U.S. Federal Reserve that it won't rush to raise interest rates have also spurred investors to reverse bets that oil would fall while the dollar would rise.

Also, the U.S. oil output could slowdown in the near future.

The US became the world's largest exporter of oil towards the end of 2018 after the Trump administration eased restrictions and allowed more off-shore drilling opportunities for American businesses.

In particular, OPEC member states are to reduce production by 812,000 barrels per day - to 25.937 mln barrels, non-OPEC oil producers - by 383,000 barrels per day, to 17.937 mln barrels. In both 2019 and 2020, China is the leading contributor to global oil demand growth.

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