OPEC: Demand for cartel crude expected to decline in 2019

Brent crude rises to $61 on Libyan supply cut, US inventories

But it is still 1.8 million barrels per day more than this time a year ago. It was only a one-week blip, however, as USA imports exceeded exports last week.

"The U.S.is pumping oil like its going out of fashion and that's providing issues for the traditional supply-demand/OPEC dynamic", said Hue Frame, portfolio manager at Frame Funds in Sydney.

North Sea Brent crude lost $2.41, or 4.0 percent, to a low of $57.20, a 14-month low, and last traded around $58.06, down $1.55.

Monday's price dip tells us two things, says PVM Oil Associates in London: "Either the 1.2 million bpd reduction in the production of the OPEC+ group is not deemed sufficient by the market, or there are other bearish factors at work". -China trade tensions could undermine oil consumption next year, as growth in supply gathers pace. It has still fallen by nearly a third since early October.

The Organization of the Petroleum Exporting Countries agreed last week with Russia, Oman and other producers to cut oil output by 1.2 million bpd from January to stem a build-up in unused inventories of fuel.

OPEC said on Wednesday that demand for its crude in 2019 would fall to 31.44 million bpd, 100,000 bpd less than predicted last month and 1.53 million bpd below what it now produces.

U.S. crude oil production decreased in the week ending December 7, the U.S. Energy Information Administration (EIA) said in a report on Wednesday. Saudi Arabia - the de facto head of OPEC - churned out 410,000 barrels a day to a historic high of 11.06 million barrels a day.

The baseline for the cut is October's production as reported in OPEC's December Monthly Oil Market report, except for Kuwait, which according to delegates will cut from September production. Gains from Saudi Arabia and the U.A.E. offset steep declines in Iran, which were the result of USA sanctions against the Islamic Republic's oil industry, the IEA said.

Iranian output posted the biggest decline, of 380,000 bpd.

West Texas Intermediate for January delivery gained as much as $1.15 to $52.80 a barrel on the New York Mercantile Exchange, and traded at $52.60 as of 8:36 a.m. local time. Brent oil prices have failed to rally even after the agreement was announced. That was the first weekly decline since October, analysts at the Sevens Report wrote in a newsletter Thursday, but they noted that given a change in the way the EIA reports production, in increments of 100,000 as opposed to exact estimates, "the decline could have been a rounding error".

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