News ID: 234144
Published: 0312 GMT November 12, 2018

Oil prices rise as OPEC+ signals output cut

Oil prices rise as OPEC+ signals output cut
AP

Oil rose by more than one percent on Monday, set for its largest one-day increase in a month after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of one million barrels per day.

Brent crude futures LCOc1 rose 80 cents on the day to $70.98 a barrel by 1205 GMT, while US crude futures rose 36 cents to $60.69 a barrel.

Saudi Energy Minister Khalid al-Falih said on Monday OPEC and its partners agree that technical analysis shows a need to cut oil supply next year by around one million bpd from October levels to avoid an unwelcome buildup of unused crude.

Falih said Saudi Arabia, the world's largest oil supplier, would cut its production by 500,000 bpd as of next month to help stabilize the market.

Any official decision on global output cuts will be made at a key ministerial meeting for OPEC and non-OPEC producers in Vienna in early December, Falih said.

Oil producers will continue to evaluate the market data prior to the Vienna summit, "but if we need to trim production by one million bpd, we will do," Falih added.

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

"We need not overreact" to falling prices, Mazrouei said, adding that crude was a dynamic market.

Iraqi energy minister spokesman Assem Jihad said his country, also an OPEC member, was hoping for "any decision that would help balance and stabilize the market".

REUTERS

The comments followed a meeting in Abu Dhabi at the weekend, where major producers started laying the groundwork to cut supply in 2019, reversing an almost yearlong expansion.

The group, including Russia and Saudi Arabia, warned that crude supply would outstrip demand next year.

In a final statement, they said they had "reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements".

The 14 members of the Organization of Petroleum Exporting Countries alone pump over a third of global crude supply.

The oil price has fallen by around 20 percent in the last month, driven lower by a rapid increase in global supply and the threat of a slowdown in demand, especially from those customers, such as India, Indonesia and China, whose currencies have weakened against the dollar and eroded their purchasing power.

Production from Saudi Arabia, Russia and the United States alone has risen by 1.05 million bpd in the last three months, based on official output figures.

This has left OPEC scrambling to adjust its own output, which, at around 33.3 million bpd, accounts for roughly a third of total global daily supply.

Reuters and AFP contributed to this story.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   
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