Oil prices continue rapid drop

Oil prices on Friday fell to their lowest point in a year and are on track for the largest one-month drop since 2014.

The value of a barrel has been dropping for seven weeks, falling around 20 percent in the month of November alone, Reuters reported Friday.

The price decline comes as supply in the U.S. is growing more quickly than demand and major producers consider cutting production.

Brent crude oil, an international benchmark, fell $2.31 a barrel, or 3.7 percent to a low of $60.29 —  its lowest since November 2017. Brent was trading around $60.75, down $1.85, on Friday morning, Reuters reported.

The Organization of the Petroleum Exporting Countries (OPEC) is reportedly planning to start withholding oil output next month in an effort to prevent a build-up of unused fuel.

Saudi Arabia, the No. 3 oil producer in the world behind the U.S. and Russia, said Thursday that it may also reduce supply.

The country has been pushing OPEC to sign onto a joint output cut of 1.4 million barrels per day.

“The question is now how much longer bears are able to keep firing. Are they going to run out of ammunition shortly or they have ample supply of bullets?” PVM Oil Associates strategist Tamas Varga told Reuters.

“It is reasonable to compare the current economic and supply/demand picture with the one four years ago. After all, it was in November and December 2014 when oil prices fell more or less to the same level where they are now,” he said.

OPEC and Saudi Arabia’s plan to reduce oil production directly contradicts a request from President Trump to maintain current levels of supply.

Trump had celebrated the falling price of oil on Wednesday, calling it a “big Tax Cut for American and the World!”

Trump thanked Saudi Arabia after releasing a statement reaffirming close ties with the country despite the CIA's reported conclusion that found Saudi Crown Prince Mohammed bin Salman likely ordered the assassination of Washington Post contributor Jamal Khashoggi.

"Our intelligence agencies continue to assess all information, but it could very well be that the crown prince had knowledge of this tragic event — maybe he did and maybe he didn’t!" Trump said in the statement, adding that "we may never know" who was responsible.

Khashoggi, a Saudi national living in the U.S., was murdered after entering the Saudi consulate in Istanbul on Oct. 2.

The Saudi government originally denied all knowledge of Khashoggi’s whereabouts but later acknowledged that he died inside the consulate after a so-called “physical altercation.”

The journalist was critical of the Saudi royal family and was reportedly killed by a team of agents who dismembered his body, which still has not been found. 

Trump told reporters on Tuesday that oil prices were one of his primary motivations for not taking action following the CIA report.

“If you want to see oil prices go to $150 a barrel ... all you have to do is break up our relationship with Saudi Arabia,” he said before leaving Washington for his Mar-a-Lago club in Florida for the Thanksgiving holiday.

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