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LONDON. — Oil prices fell more than 2 percent yesterday after US President Donald Trump put pressure on OPEC not to cut supply to prop up the market.
Brent dropped $1,97 a barrel, or 2,8 percent, to a low of $68,15 before recovering to around $68,52, down $1,60, by 1420 GMT. US light crude was $1,35 lower at $58,48. Both crude benchmarks have fallen more than 20 percent since peaking at four-year highs in early October.
“The market now increasingly looks concerned about the prospect of too much supply. Hedge funds and other speculative (investors) have swiftly changed from the long to the short side,” said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.
Top crude exporter Saudi Arabia has watched with alarm how supply has started to outpace consumption, fearing a repeat of a glut that brought a price crash in 2014. Saudi Energy Minister Khalid al-Falih said on Monday the Organisation of the Petroleum Exporting Countries agreed there was a need to cut oil supply next year by around 1 million barrels per day (bpd) from October levels to prevent oversupply. But Trump has made it clear he wants oil prices to fall.
“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” the president said in a Twitter post on Monday.
That led to a sharp price drop on Monday and the sell-off continued into Tuesday.
“This tweet certainly did not help prices,” ING commodities strategist Warren Patterson said. — Reuters.
Online Reporter