Publicado: Mar, Noviembre 13, 2018
Global | Por Milagro Delgado

Saudi Arabia seeks 1 million bpd cut in oil production

Saudi Arabia seeks 1 million bpd cut in oil production

Saudi Arabia plans to reduce oil supply to world markets by 0.5 million barrels per day in December, Khalid al-Falih, its Minister of Energy, Industry and Mineral Resource said on Sunday.

Saudi Arabia will reduce oil supply next month in response to lower demand, and more cuts could follow next year.

"Many of us share this view", the minister said when asked about the need for a cut.

Major producers, including Russian Federation and Saudi Arabia, on Sunday warned that crude supply would outstrip demand next year at a joint OPEC non-OPEC ministerial monitoring committee meeting in Abu Dhabi.

Energy ministers from Russia, Oman, Kuwait and Algeria were among those who attended the one-day meeting.

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

Brent crude dropped below United States dollars 70 a barrel on Friday for the first time since April while the New York's West Texas Intermediate (WTI) sank below USD 60 a barrel, a nine-month low.

Earlier this week, Iraq's Oil Minister Thamer Ghadhban said the country plans to increase its oil output and export capacity in 2019, with a focus on the southern oilfields, and is close to reaching a deal with worldwide companies.

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.

The country faces uncertain prospects in its attempts to persuade other producers to agree to a coordinated output cut.

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"A new strategy needs to be formed... whether it is a cut in production or something else, but it will not be an increase in production", he said.

His comments appeared to be a response to U.S. Special Representative for Iran Brian Hook, who said last week that Iranian vessels would lose access to global insurance markets under the U.S. sanctions and so would be a risk to ports and canals which allowed them access.

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

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

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

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

It was "premature to talk about a specific action", he told reporters, asked about the possibility of an output cut to support sliding prices.

Al-Falih said that demand for Saudi crude was weaker for the first time since the kingdom started boosting production in the May-June period.

"We'll make sure we'll steer the global oil markets ... to make sure we don't jerk the oil markets into swinging either side", said Mr Al Falih.

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