Crude futures dropped in European morning trading on Tuesday, as the market weighed tweets from US President Donald Trump demanding OPEC maintain oil output.
At 1110 GMT, ICE Brent futures were down $1.43 at $68.69/b, while the NYMEX December light sweet crude contract was down $1.37 at $58.56/b.
On Monday, US President Donald Trump tweeted after OPEC and its allies signaled that they would consider cutting oil output in early 2019 to stave off an oversupply.
"Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!" Trump said in a tweet. That tweet followed repeated public comments by Trump this year demanding the bloc pump more crude and accusing the organization of keeping oil prices artificially high, despite the US imposition of sanctions on Iran.
On Tuesday, UAE energy minister Suhail al-Mazrouei said OPEC would not respond to US pressure to lower oil prices, but would seek a balanced market.
"We are not going to respond to political needs," Mazrouei, who holds the rotating OPEC presidency this year, told S&P Global Platts. "We will do what is right for maintaining balance in supply and demand. Anything else is not our job. Our job is not to keep prices low or raise the prices, our job is to maintain balance in the market, but not be oversupplied or undersupplied." That follows comments on Monday by Saudi energy minister Khalid al-Falih that OPEC and its partners would need to cut at least 1 million b/d from October's output levels to avoid oversupply by early 2019.
"With the US midterm elections out of the way, it seems that [Saudi Crown Prince Mohammed Bin Salman] wrongly assumed that he could now send al-Falih out on an oil tightening mission," Petromatrix analyst Olivier Jakob said in a morning note.
The tug-of-war between Trump's comments and the OPEC push to once again restrict production come against the backdrop of the return of US sanctions on Iran, which until recently was expected to tighten global oil markets sharply, and the scandal over the death of the Saudi journalist Jamal Khashoggi in the Saudi consulate in Istanbul, which has strained Saudi-US relations.
It also comes amid expectations of still rising output and stocks from US shale. Analysts surveyed by S&P Global Platts Monday expected US crude stocks to rise by 2.38 million barrels for the week ended November 9. Stock figures will be released by the American Petroleum Institute on Tuesday followed by the more definitive figures from the US Energy Information Administration on Wednesday.
Tuesday will also bring a monthly report from OPEC, while the Paris-based International Energy Agency's monthly report will be released on Wednesday.
