Survey: OPEC expected to cut output

OPEC and its allies will announce production cuts to check a slump in oil prices when they meet next week, according to a Bloomberg survey.

Thirty-one of 36 analysts and traders in a global poll predicted that the coalition of producers known as OPEC+, led by Saudi Arabia and Russia, will announce output curbs when it gathers on Dec. 6-7. The average estimate for the size of the cut was 1.1 million barrels a day.

Oil prices have collapsed 30 percent in less than two months on concern that booming U.S. shale production and faltering demand — combined with unprecedented output from the Saudis and Russia — will trigger a new surplus next year.

“We anticipate that Saudi Arabia and OPEC will cut crude supply by 1 million barrels a day or more at the upcoming meeting,” said Mike Wittner, head of oil-market research at Societe Generale SA in New York. “This will be necessary to avoid severe oversupply in 2019.”

President Donald Trump has repeatedly called on the Saudis to work on lowering prices and could have extra leverage now as U.S. lawmakers threaten punitive measures against senior officials following the murder of Saudi dissident Jamal Khashoggi.

“What Trump’s asking Saudi Arabia to do is commit the ultimate act of self-harm — to continue to oversupply a market when they are having their own fiscal constraints,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC in New York.