FxWirePro: Brent likely to slide towards $69 per barrel if Saudi Arabia follows through promise of production increase

After reaching an $80.5 per barrel, global oil benchmark Brent has declined to $75.8 per barrel as of today. Saudi Arabia and Russia’s joint hint that production cap might be eased by a million barrel per day is weighing on the Brent price, along with a continued increase in production in the United States, which has increased by more than a million barrel per day in 2018 so far.

India, which almost completely relies on energy import, pressed the case of higher oil price to Saudi Arabia as the country started feeling the heat of higher oil price. Indian oil minister Dharmendra Pradhan confirmed that Saudi Arabia is revisiting policy on oil output cuts. It is also being reported that the Trump administration has secretly urged Saudi Arabia to raise production cap by a million barrels per day. Saudi energy minister has said in recent days that keeping oil price to a level that supports global economic growth is one of the key goals.

So far, only hints and promises of reviews have been made but if Saudi Arabia led OPEC follows through its hint, we are expecting Brent crude to fall to as low as $69 per barrel or even beyond.