Saudi says to cut oil output as producers discuss price dip

Cornelia Mascio
Novembre 12, 2018

Energy ministers of top producers Russian Federation and Saudi Arabia will join other OPEC and non-OPEC officials for the meeting of the Joint Ministerial Monitoring Committee, which oversees production levels.

Saudi Arabia, the world's top oil exporter, has been pumping 10.7m bpd since October, according to Falih.

Ahead of the meeting, he acknowledged that so far there was no new deal to cut production among OPEC and non-OPEC producers, who struck an agreement in late 2016 to cut output by 1.8 million bpd to tackle an oversupply crisis.

While Riyadh has chose to lower production, the rest of the attendees did not come to a consensus on the matter, according to Falih.

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 USA output.

Asked by reporters in Abu Dhabi if the market is in balance, Saudi Energy Minister Khalid Al-Falih said: "We will find out. We have our meeting later".

He also attributed the sharp drop in prices to "microeconomic uncertainties", and signs of a build-up in crude inventories.

The announcement came after crude prices declined by around 20 percent over a month, as supply has surged, especially by the top-three producers USA, Russia and Saudi Arabia.

The latest price slump comes after the United States boosted production of shale oil, while Saudi Arabia, Russia and others raised supplies of crude amid signs of slowing demand.

There have also been signs that renewed United States sanctions on Iranian oil exports may have a softer-than-expected impact.

Through large production cuts starting at the beginning of 2017, they managed to push up oil prices from below $30 a barrel to over $85 a barrel in October, strongly improving their revenues.

But producers eased output cuts in June after signs of a tighter market and higher prices, selling hundreds of thousands of extra barrels.

Al-Falih last month said there could be a need for intervention to reduce oil stockpiles after increases in recent months.

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