A seemingly relentless rise in USA crude supply, together with Saudi Arabia's insistence that it will not cut output on its own to stabilize the market, wiped out overnight gains in oil futures.
But since reaching four-year highs in October, oil prices have plunged around 30 percent as worries about falling demand in a slowing world economy have taken their toll.
Adding to the uncertainty in the oil markets were President Vladimir Putin's comments.
"While oil retreated on oversupply concerns and it's still possible that it could teeter in the short term, prices will go higher in the mid- to long-term", Lim Jaekyun, a commodities analyst at KB Securities Co., said by phone in Seoul. With fears of a scarcity now giving way to worries about oversupply, the Organisation of Petroleum Exporting Countries and allies such as Russian Federation are preparing to discuss more cuts when they meet next week in Vienna.
In public and private, the president has told the Saudis he wants cheaper crude, even disclosing that he berated MBS in a phone call in October when worldwide benchmark Brent surged above $80.
Industry insiders disclosed to Reuters that Russian Federation was increasingly convinced that it needed to cut oil productions and would discuss "how quickly and by how much" the reduction to take place.
FGE estimates that Iraq could pump as much as 4.7 million barrels a day next year - depending on what OPEC and other producers decide at their December 6 meeting - compared with about 4.5 million in November. This increase in the country's oil inventory was fed by increasing oil imports.
The biggest snag in OPEC's push for a consensus on cutting oil output could come from relentless growth in supply from its second-biggest producer, Iraq.
Saudi Crown Prince Mohammed bin Salman, a key Trump administration ally, wants prices at $80 or more for his economic reforms. EIA says USA crude oil inventories are now 7 percent above the five-year average for this time of year. Even if they can slip an implicit supply cut past Trump, then persuade Moscow to make a substantial supply reduction, few delegates and OPEC watchers believe it would deliver the kind of robust public deal that would send oil prices back to the $75-$85 range seen earlier this year.
"Even if Russian Federation and Saudi Arabia reach an agreement at the G-20 to decrease output", other countries might respond by increasing their output, Kocaman said. The global benchmark traded at an US$8.19 premium to WTI. That doesn't mean the Kremlin is about to give up its alliance with Saudi Arabia, which extends beyond oil, but it means could drive a hard bargain.
By August 2018, Saudi Arabia's production was up by 630,000 barrels per day compared with June 2014 and Russia's output had climbed by 525,000 bpd.