OPEC is under pressure.
US crude oil prices have crashed almost 26% from their peak in October as fear of a shortfall in supply has turned into talk of a glut.
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They suffered their worst day since September 2015 on Tuesday, plummeting 7% to a one-year low. That fall came just 24 hours after Saudi Arabia promised to pump fewer barrels in December and threw its weight behind a proposal for OPEC to cut production by one million barrels per day.
"Normally talk of Saudi production cuts would help to support the price of crude," said Russ Mould, investment director at AJ Bell. But other factors, such as soaring US production, are "exerting an even stronger influence," he added.
Another factor is President Donald Trump's decision to allow some countries to continue buying Iranian oil for six months following the reintroduction of US sanctions on November 5.
Members of the OPEC cartel and Russia agreed in June to pump more oil to make up for the anticipated loss of Iranian exports. The Trump administration's decision to grant temporary waivers caught them by surprise.
They'll regroup in Vienna on December 6 to determine their next move, and they may have to deliver a bigger cut than the one suggested by Saudi oil minister Khalid Al-Falih earlier this week.
'Signs of an imbalance'
Reuters reported that OPEC and its partners are discussing cutting supply by as much as 1.4 million barrels per day in 2019 to avert a glut that would weigh on prices.
"We will do whatever it takes to sustain the stability that we have achieved," OPEC Secretary General Mohammed Barkindo told CNN Business' Emerging Markets Editor John Defterios.
The International Energy Agency warned on Wednesday that supply is expected to exceed demand through 2019. In its monthly market report, OPEC said global demand for its oil next year would be about 1.1 million barrels per day less than in 2018, and 1.4 million below current OPEC production.
"At the moment, the market looks balanced in the fourth quarter, but going into 2019, there are signs of a resurgence of an imbalance which we are determined to stay the course," Barkindo said.
OPEC may need to work hard to persuade Russia to cut supply.
Russia's energy minister Alexander Novak said on Sunday it was too early to make a decision to reverse course.
Members of OPEC are "working the phones ... to ensure that we build this consensus before they arrive in Vienna," Barkindo said.
If OPEC and its allies cut, it would mean a win for American shale producers. US oil production continues to reach new record highs. US output topped 11 million barrels per day in August, making it the world's biggest producer.
The United States is "more than compensating for falls in production in Iran, Venezuela and elsewhere," the IEA said in its report on Wednesday.
Following the "jaw-dropping" growth in August, when US output climbed by nearly three million barrels per day over the same month last year, the United States "shows little sign of slowing down," the IEA added.
It expects US output to increase by 2.1 million barrels per day in 2018, and another 1.3 million next year.
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