Economy

Saudi minister calls for 1 mln bpd global oil output cut

Saudi minister calls for 1 mln bpd global oil output cut

Members of Opec, the cartel that pumps about a third of the world's crude, agreed that supply would need to fall by about a million barrels per day next year. The biggest increases were from the United Arab Emirates and Saudi Arabia, while Iranian supply continued to tumble.

Senate Minority Leader Chuck Schumer, a New York Democrat, had previously supported legislation that would remove an existing immunity shield that prevents the oil cartel and its members' national oil companies from being sued under US antitrust law.

The largest producer in the Organization of Petroleum Exporting Countries is once again taking the lead to address huge shifts in the market.

The two companies are looking at possible cuts as record-high U.S. production of 11.6 million bpd, outpaced Saudi Arabia's 10.7 million bpd and Russia's 11.4 million bpd. Russia, by contrast, is in a more comfortable position, and Energy Minister Alexander Novak showed no sign he was ready to act immediately.

Turn about: Opec members and its 10 allies are mainly anxious about the increasing U.S. production (11.4 million barrels a day).

"We will assure you that when we meet in December we will go to the market with the solution that will ensure market stability", he said.

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

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Khalid al-Falih, Saudi Arabia's energy minister, said: "The consensus is that we need to do whatever it takes to balance the market". Russian Federation is now pumping about 10,000 to 20,000 barrels a day below October levels, and demand from customers is "fairly stable", Novak said. Iraq has successfully boosted production to a record, and its more fragile economy may make it loathe to reverse course.

As reported by Bloomberg, declines in oil prices are forming up a catalyst relationship with emerging markets.

"We want to enter 2019 with a minimum amount of stocks", Falih said.

"With the Iranian sanctions not being as severe as initially feared, officials from the OPEC and non-OPEC producers may discuss at the weekend the need to bring compliance back down... or risk another 2014-style slide in prices". The Trump administration at first insisted it would seek to curtail all of the country's exports, only to grant waivers to eight of its customers just as the sanction look effect on November 5. In addition to those doubts, the economic outlook for the year ahead, which underpins the strength of oil demand, is cloudy.

But he said the option of reducing production is possible, only if the market needs it.

However, market participants say the global energy market could see another period of excessive supply of crude oil as soon as next year - with oil bulls looking at Bakken anxiously.

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