The oil price is in the red Tuesday, just a day after the valuable commodity moved higher. The oil price has resumed its downward path following a tweet from US President Trump, warning OPEC and Saudi Arabia not to cut production. A further outlook reduction from OPEC added to the gloom.
By around 1500 BST, the price of Brent crude oil was 2.15% lower at $68.61 per barrel. The price of US WTI oil, meanwhile, lost 2.09% to trade at $58.68 per barrel.
Oil price falls after Trump tweet
Late Monday, amid reports that Saudi Arabia’s energy minister said the country was planning to reduce its oil output by 500,000 barrels per day, during December, Trump tweeted that he hoped that was not the case.
“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!,” Trump shared on Twitter, Monday.
And, just as the price of oil gained a boost from news that the oil output could fall, it lost ground sharply, in the wake of confirmed support for lower oil prices, from the US President.
OPEC cuts oil demand outlook
Adding to downward pressure on the price of oil, was a fourth straight reduction in OPEC’s 2019 oil demand outlook.
The oil cartel said global demand for the black stuff is expected to rise by 1.29 million barrels per day in 2019. That’s a 70,000 bpd reduction from its October forecast and notable below its initial November forecast that demand in 2019 would grow by 145 million barrels per day.
“Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” OPEC said.
“The recent downward revision to the global economic growth forecast and associated uncertainties confirms the emerging pressure on oil demand observed in recent months,” the oil group added.