Oman oil minister says majority of OPEC and its allies support cut

Darnell Taylor
November 12, 2018

Now Saudi Arabia wants to act to prevent a further slide in prices which fell below $70 a barrel on Friday, and is leading discussions on cutting oil output next year, the sources said.

Cailin Birch, analyst at the Economist Intelligence Unit, said a slowing oil demand is beginning to appear in China, the world's largest importer of crude oil.

A big concern for Saudi Arabia and other traditional producers from the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) is the surge in U.S. output.

Saudi Arabia will cut its December oil output by 500 barrels per day in comparison to November's output, the kingdom's Energy Minister Khalid al-Falih said at the meeting of the Joint Ministerial Monitoring Committee.

When asked about the possibility of an output cut, he insisted it was "premature to talk about a specific action".

In his speech at the start of the meeting, Falih said the recent sharp drop in prices had "surprised us".

He was speaking in Abu Dhabi where an oil market monitoring committee was held on Sunday, attended by top exporters Saudi Arabia and Russian Federation.

US West Texas Intermediate (WTI) crude oil futures were at $60.73 per barrel, up 54 cents, or 0.9 percent from their last settlement.

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The UAE's energy minister, Suhail al-Mazrouei, said balancing the market would "require changes in the strategy" of producers.

Meeting in Abu Dhabi to examine how to curb a sharp slide in oil prices, the producers said they "reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements".

The country is targeting production capacity of 5m bpd in 2019, with average exports expected to reach around 3.8m bpd.

He said the market sentiment has shifted from one of fearing shortages to one anxious about oversupply.

Russian Federation stated on Sunday that it did not believe that the oil market would face a probability of an oversupply next year.

"Prices have been falling amid a continued rise in crude supplies from big producers, such as Saudi Arabia, Russia and the U.S., more than compensating for lost Iranian barrels", Forex.com analyst Fawad Razaqzada told AFP.

An official from group member Kuwait said on Monday major oil exporters over the weekend had "discussed a proposal for some kind of cut in (crude) supply next year", although the official did not provide any detail. After dozens of media reports claimed that Iranian oil exports had been falling sharply and steadily, data now suggests the fall has been less steep-a fact immediately weighing on oil prices.

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