USA bank Morgan Stanley said the cut was "likely sufficient to balance the market in 1H19 and prevent inventories from building". The U.S. dollar is trading near its highest level since mid-2017, making purchases for oil consumers outside of the U.S. more expensive, global demand worries and political tumult across Europe are all weighing on crude futures.
The announcement came three days ahead of a meeting of the Saudi-led OPEC and its allies to reshape global oil policy amid persistent concerns over a supply glut.
On Tuesday, oil prices rose amid broad expectations that the upcoming OPEC meeting would yield a deal on production cut.
"We will wait and see to take a decision on extending the production reduction agreement after six months", he said.
The agreement will enter into force on January 1, 2019. "On top of this, Saudi Arabia also needs higher oil revenues to fund domestic Saudi spending".
"We believe the (OPEC) cuts were sufficient", Yazhari said, predicting a "relatively balanced oil market" and stable inventories next year. Since October, 2018 Oil price have dropped by nearly 30%, and this decision is expected help oil producers.More news: Swath of South faces wintry mess: Snow, sleet, freezing rain
Despite this, the outlook for next year remains muted on the back of an economic slowdown. The over-consumption of production in the market and predicting the decline in the world economy for the next year would have helped to reduce oil prices. "OPEC refused to specify which country would cut how much".
"The near-term outlook for oil remains cloudy however as US supply continues unabated, confirmed by news at the end of last week that for the first time in 75 years, America became a net oil exporter", Cawley added. Saudi Arabia is now the world's largest oil exporter.
"Secretary Perry advocated for the expansion of joint partnerships with the United States as Qatar seeks to grow its LNG operations around the world", the Department of Energy said.
Iran, Libya and Venezuela are excluded from the reduction of oil production arrangement.
The Libyan outage followed last week's decision by the Organization of the Petroleum Exporting Countries and some non-OPEC producers including Russian Federation to cut supply by 1.2 million barrels per day (bpd) for six months from January 1.
Although Qatar is OPEC's smallest Middle East oil producer, it's now the world's biggest liquefied natural gas (LNG) exporter. The contributions from OPEC and non-OPEC will correspond to 800,000 barrels per day and 400,000 barrels per day, respectively.