Oil prices sink on supply glut fears


Benchmark oil contract, Brent North Sea, tumbled under $60 per barrel and New York's WTI dived more than seven percent to $50.63. January crude oil trading on the New York Mercantile exchange were down 6.4% at $51.15, as WSJ said that Saudi-led Organization of the Petroleum Exporting Countries is moving toward a compromise that would reduce output but also appease President Donald Trump's demands to keep prices lower.

At the same time, the world's biggest exporter will respond to demand for oil and won't oversupply the market, he told reporters on Thursday at the mining complex of Wa'ad Al Shamal in northwestern Saudi Arabia.

For 2018, Brent is expected to average $73.91, down from the October survey forecast of $74.40, and compared to average Brent Crude price of $73.26 so far this year.

The Saudis have signaled they will throttle back production in December, but unless OPEC and Russian Federation can reach a new deal to constrain supply at their meeting next month, analysts see the prospect of sustained oversupply in 2019, undoing the group's success over the last two years to drain global inventories.

The benchmark USA crude contract slid 6.1 percent to $51.30 per barrel in NY.

Among other weak spots, the materials sector, which houses precious and base metals miners, lost 2.3 per cent after gold slipped as the dollar regained momentum.

Friday brought another round of dramatic price cuts in the oil patch.

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Opec has been trying to stabilise the market since November 2016, but these efforts have also come alongside a surge in production in non-member countries, namely the US, Russia and China, which risk flooding the market and damaging prices. "Thank you to Saudi Arabia, but let's go lower!" he wrote in a tweet on Tuesday.

"Oil dropped, and some of the numbers from Europe have been a little weak", said John Carey, managing director and portfolio manager at Amundi Pioneer Asset Management in Boston. He called the drop "a big Tax Cut for America and the World". Gap added 0.2 percent to $25.86.

Bond prices fell Friday.

The dollar fell to 112.85 yen from 113.06 yen late Wednesday. Germany's DAX index rose 0.5 percent, while France's CAC 40 gained 0.2 percent.

Elsewhere in the currency market, the pound was down 0.5 per cent on concerns over the passage of an agreement for Britain to leave the European Union. Both sides were finalizing the terms of the divorce Friday and expected to sign off on the deal Sunday, though it's unclear whether the British parliament will pass the deal.

Earlier in Asia, South Korea's Kospi shed 0.6 percent and Hong Kong's Hang Seng index dropped 0.4 percent.

The FTSE 100 index of leading British shares slipped 0.1 percent. Shares fell in Taiwan and rose in Singapore, Thailand and Indonesia. They were closed on Thursday for the Thanksgiving holiday.