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The rising oil inventories in the past few weeks and the ongoing economic slowdown may require oil producers to change course from their existing output production, a committee of oil producers said.
There is a need to come up with a game plan on how much oil to pump next year to prevent the market from tipping off its current balance, the Joint Ministerial Monitoring Committee (JMMC) that oversees the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies said in a statement on Thursday night.
The JMMC noted on the “very comfortable supply level relative to demand” situation right now, but pointed out that the rise in oil inventories in recent weeks and ongoing concerns on an economic slowdown next year may require a “changing course”.
The statement from the committee is a contradiction from Saudi Arabia’s energy minister Khalid Alfalih’s “produce as much as you can” comment on the cartel earlier this week.
Markets have been rattled by worries on the trade war between the US and China. This month, and the International Monetary Fund downgraded global economic growth outlook for this year and next year attributing it to the effects of the tariff war.
The step up in supply from Saudi Arabia and Russia as well as rising inventories in America have seen Brent crude fall by more than 7% this month.
At 2.02am Eastern Time, Brent oil was 0.59% lower at US$76.28, while West Texas Intermediate (WTI) was down 0.58% at US$66.59.