Saudi Arabia said over the weekend it planned to reduce exports by 500,000 barrels per day to support faltering prices and avoid a global supply glut. Crude oil prices have been plummeting throughout October and November, and it is now trading well into a bear market or a fall off of more than 20%.

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The pull back in oil prices has been attributed to increased production fro non-OPEC members, namely Russia and U.S. shale in anticipation of the drop off in supply from the Iran sanctions.

Furthermore, the U.S. government recently decided to soften its oil sanctions on Iran, which exacerbated the supply surplus concerns.

Meanwhile, there are growing concerns over diminished demand in a weakening global economic outlook, especially with the trade war disputes between the U.S. and China.

“Basically, we’ve gone from envisioning tighter supplies six weeks ago to now expecting excess supplies on the market, and demand is starting to falter,” McGillian added.

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