Saudi minister calls for 1 mn bpd global oil output cut

Falih: Saudi Arabia to cut December oil output by 500000 bpd

Saudi Arabia to cut December oil exports by 500000 bpd

Mr Al Falih expressed concern, however, over the recent downward turn of the oil markets, which had through the summer held about $80 per barrel, only to fall to $69 on Friday, after the US Energy Information Administration reported higher US production figures and the White House granted waivers to eight of Iran's top oil buyers.

Meeting 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". Speaking in Abu Dhabi, he said that Saudi Arabia's announcement would now "probably firm the price".

"In the short term, this is a positive for oil, but we must question the impact over the longer term unless it's the sign of more to come from OPEC", said Market Analyst Neil Wilson.

Iraq and Saudi Arabia agreed on Saturday to work together to stabilise oil markets, Iraq's Oil Ministry spokesman Asim Jihad said, without giving further details.

Oil prices advanced steadily through Monday, with both Brent crude and West Texas Intermediate (WTI) seeing gains of more than a dollar per barrel. West Texas Intermediate, the US marker, climbed 0.9 percent to $60.75, paring its losses after falling into a bear market last week.

A decision is expected only when the OPEC and non-OPEC ministers meet in Vienna on 5 December to assess the global energy market.

"Saudi Arabia is flexible and will do what other countries agree to do". Russia, by contrast, is in a more comfortable position, and Energy Minister Alexander Novak showed no sign he was ready to act immediately.

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He said market sentiment had shifted from fears of shortages to worries about oversupply.

Opec and its allies outside the exporters' group, led by Russian Federation, met in the UAE capital to recalibrate their strategy of expanding production following a bearish turn of the markets last week. "They seem to be sitting squarely on the fence about pulling the barrels back".

The energy minister said: "There will need to be a reduction of supply from October levels approaching 1m barrels ..." Saudi Arabia will cut production as well as exports, he said.

"We have to study all the factors", Falih said. "We're seeing some signs of this coming out of the U.S. We have not seen the signs globally, nor can we predict that they will persist into 2019".

Major oil producers said Sunday that crude supply next year would outstrip demand, calling for new strategies based on production adjustments.

The world›s top oil exporter has been pumping 10.7 million bpd since October, according to Falih.

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