Since October, the oil price has fallen to below $70 a barrel, its lowest in eight months.
US crude futures lost $3.59, or 6 per cent, to hit $56.35 a barrel, lowest since December 2017, as of 1:45 p.m. EST (1845 GMT), putting it on track for its largest one-day percentage loss since January 2016.
Alongside this, much depends on not only OPEC's actions but also Russian Federation and the U.S., who are both producing at record levels, particularly as demand is seen dropping for OPEC oil.
As for the justification for the cuts, the International Energy Agency on Wednesday pointed out that global oil supply will outpace demand due to a "relentless" rise in output and slower economic growth in some countries. As of last week, hedge funds and other money managers had reduced their long position in oil contracts to their lowest since August 2017.
He said China, India and five other countries are allowed to buy some barrels of oil from Iran, adding that the development suggested that the United States did not outrightly ban those countries from buying Iranian crude.
Also, the former President, International Association of Energy Economist ( IAEA), Prof Adeola Akinnisibu, said many barrels of Iranian crude would still get to the market, as long as the USA allows some countries to buy the product.
But Trump has made it clear he wants oil prices to fall. Kazakhstan said on Tuesday its oil output rose 4.8 per cent to 74.5 million tonnes in the first 10 months of 2018, equivalent to 1.82 million bpd.
The issue of production cut is expected to be discussed formally at the upcoming meeting of OPEC members and other partnering countries at a high-level meeting scheduled on December 6 in Vienna. The talks are preliminary, and the size of the final cut will largely depend on the starting point they use, said one of the people.
The producers, known informally as "OPEC+", will convene in the first week of December in Vienna to decide further steps. Some countries such as India and South Korea have signed a waiver, that will allow them to continue exporting limited volumes of Iranian oil without being shut out of the U.S. financial system.
OPEC is comprised of most of the world's top oil producers, meaning its decisions about production sway the prices of gas across the planet. Output, however, rose by 127,000 bpd to 32.9 million bpd, Opec said. The head of Lukoil, Vagit Alekperov, voiced opposition this week to any cut.
"The head fake on Iranian sanctions, which turned out to be misleading when US actions were limp, combined with putting more pressure on producers helped create the oversupply in the market", Morse said. The surge in United States production is contributing to rising stockpiles. The persistent has also been linked to the growing concerns and warnings from the IEA and OPEC over a supply glut, heading into 2019.
