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

Galtero Lara
Noviembre 12, 2018

Oil prices rose by about one percent on Monday after top exporter Saudi Arabia announced a cut in supply for December, seen as a measure to halt a market slump that had seen crude decline by 20 percent since early October.

The announcement was made by Khalid al-Falih, the kingdom's energy comments, in comments he gave to reporters at the meeting in Abu Dhabi, UAE.

Saudi Arabia has been pumping 10.7 million bpd since October, Falih said.

But Falih said ahead of the meeting of OPEC and non-OPEC key producers that there was not yet consensus on a broader output cut.

During a meeting in Baghdad, Iraq and Saudi Arabia's oil ministers also discussed an electricity grid connection between the two countries to meet Iraq's power needs, he said.

He insisted it was "premature to talk about a specific action", when asked about the possibility of an output cut.

"We have to study all the factors", he said.

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But the question is how much is needed to reduce by the market, one of the sources said, speaking in Abu Dhabi where a market monitoring committee is due to be held on Sunday, attended by top exporters Saudi Arabia and Russian Federation.

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

The sources said any such deal would depend on factors including the level of Iranian exports after the United States imposed sanctions on Tehran but granted Iran's top oil buyers waivers to continue buying oil.

In his speech at the start of the meeting Falih said the recent sharp drop in prices has "surprised us".

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.

Commerzbank, Germany's second-largest lender, said Friday that oil producers must act to prevent prices tumbling.

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