The news comes after several Organisation of Petroleum Exporting Countries (OPEC) members and crude exporters warned around oil-exporting nations to launch a fresh round of output cuts, after US crude oil prices plunged dramatically.
The committee says the oil market is forecast to swing into oversupply next year, leading to the December supply cut.
IG market analyst, Kyle Rodda says investor concerns over future cuts are pushing the price of WTI to $60.00 and the price of Brent to $70.00.
“The tenth successive day of falls in the price of oil mark the longest daily losing streak for the black stuff in history, leading OPEC+ to call for production cuts within oil producing countries.
The situation could prove a political hot topic in the months to come: Western leaders (particularly US President Donald Trump) have maintained their vocal desire for lower prices, while the members of OPEC continue to struggle to organise a coherent view of what oil output ought to be given the current global economic and geopolitical back drop.” Mr Rodda said.
Saudi Arabia announces December supply cut
Oil prices rose by about 1% on Monday as Saudi Arabia announced a cut in supply for December. Saudi Arabia energy minister said it plans to reduce oil supply to world markets by 0.5 million barrels per day in December.
International benchmark Brent crude oil futures were at $71.11 per barrel on Monday, up 93 cents, or 1.3 % from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at $60.73 per barrel, up 54 cents, or 0.9 %from their last settlement.
Saudi Arabia Energy Minister, Khalid al-Falih said that crude oil nominations would fall by 500,000 bpd in December versus November due to seasonal lower demand.
The news comes after the marke's tenth successive day of falls in the price of oil, marking the longest daily losing streak in history.
Russia denies possibility of oversupply in 2019
Analysts say the outcome OPEC’s meeting next month is likely to build around Russian and Saudi decisions to futher cut supplies.
Russia -- the world's second biggest oil producer after the United States and Saudi Arabia, has indicated on Sunday that it did not believe the oil market would face oversupply next year., Despite OPEC's warning.
Russian energy minister Alexander Novak told reporters on Sunday that he did not believe the market would face a certain seasonal oversupply next year, however he said it could possibly see oversupply in the next few months.
Mr Novak said that the oversupply would be balanced by mid-2019 and demand may even exceed supply.
Sanctions on Iran’s oil sector took effect on November 5, with the US granting sanction waivers to eight exporting countries.
Iranian media reported on Sunday, three unnamed companies paid $64.97 per barrel for two crude shipments of 245,000 barrels each and one shipment of 210,000 barrels, , as US sanctions on the country take effect.