Oil prices fall after OPEC+ talks, European Central Bank rate cut

Oil Set for Weekly Drop as IEA Warns OPEC Faces Looming Surplus

Oil Set for Weekly Drop as IEA Warns OPEC Faces Looming Surplus

"Again, it is a battle between the forces of OPEC and those of slowing global growth and thus demand", said Greg McKenna, strategist at McKenna Macro.

Oil prices jumped on Thursday, bouncing back from heavy losses in the previous session, buoyed by moves to ease trade tensions between Washington and Beijing and a drop in U.S. crude inventories to the lowest in almost a year.

Benchmark Brent crude was down 25 cents at $60.13 a barrel by 0830 GMT, while U.S. West Texas Intermediate was up 5 cents at $55.14.

Hopes of progress in the trade dispute lent support. Pressure could come from weak economic reports and a sell-off in the stock market. The median probability of a U.S. recession in the next two years held at a high of 45 percent, and the chance of one in the next 12 months held at 30 percent.

Still, President Donald Trump said on Thursday he would not rule out an interim deal with China on trade, though he prefers a comprehensive agreement.

In oil markets, however, concern over whether Trump can achieve progress on the trade dispute has overshadowed OPEC's Thursday agreement to trim output by asking members Iraq and Nigeria to bring their production back in line with targets.

Also feeding the bearish sentiment, the International Energy Agency, which advises industrial economies on energy policy, said surging US output would make balancing the market "daunting" in 2020.

Saudi's Prince Abdulaziz said his country would keep cutting by more than it pledged in the pact that has throttled supply from OPEC and its partners by 1.2 million barrels per day.

According to IEA's market report, so far in 2019, USA crude oil production growth has stalled-production in June was just 45,000 bpd higher than the output in December 2018.

He told the Joint Ministerial Monitoring Committee (JMMC) meeting that it was imperative to restore stability in the oil market, where prices have slumped to below $60 a barrel.

Prince Abdulaziz said the wider Opec+ alliance which includes Russian Federation is prepared to act to protect the market if sanctions-hit Iran, also a member of the group, returns to the market.

UAE Energy Minister Suheil al-Mazrouei said on Sunday that the group will do whatever necessary to stabilise the market, and that further production cuts could be considered. The bearishness at the end of the week is being fueled by a pessimistic outlook for demand.