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Oil tumbles 5 percent after OPEC hints at smaller output cut

Reuters  |  LONDON 

By Amanda Cooper

LONDON (Reuters) - Oil lost nearly 5 percent on Thursday, after OPEC signalled it may agree to a smaller output cut than expected and as concern over the economic impact of trade tensions hit global stocks.

The (OPEC) is meeting in to decide its production policy in coordination with non-OPEC producers including Russia, and

Expectations had been for a joint cut of between 1 and 1.4 million barrels per day (bpd), until Saudi minister said before the meeting that the "OPEC+" group would be happy with a cut of just 1 million bpd.

Brent crude futures fell $2.72 on the day to $58.84 a barrel by 1043 GMT, having hit a session low of $58.36, while U.S. futures were last down $2.32 at $50.57 a barrel. The two have lost 30 percent in value this quarter alone.

"Overall, this shows the weak momentum in the market right now and it has clearly not been helped by what has happened over night ... with the sell-off in stocks and weakness in bond yields," said.

"But (OPEC) know how to handle markets. They might be talking it down and then delivering a sucker-punch a bit later, that could also be the outcome."

Led by Saudi Arabia, OPEC's has risen by 4.1 percent since mid-2018, to 33.31 million bpd.

from the world's biggest producers - OPEC, and the - has increased by a 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 percent of global consumption.

"The proverbial rabbit needs to be pulled out of the hat. Are we going to see it or not?" Saxo's Hansen said.

European equities hit their lowest in two years and commodity-sensitive currencies such as the Russian rouble fell sharply, in part because of the slide in the oil price, but also with the arrest of a top of Chinese in for extradition to the United States

The arrest of Huawei's Meng Wanzhouof, who is also the daughter of the firm's founder, triggered renewed fireworks coming just as and prepare for crucial trade negotiations.

said in its Global Outlook published on Thursday that "investors need to lower their expectations" and that "2019 should be a period of lower returns and higher volatility".

said that it expected "the global economy to slow over the next several quarters" although it added that "not one major economy is near recession."

(Additional reporting by in SINGAPORE; Editing by Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 16:43 IST