Oman oil minister says majority of OPEC and its allies support cut

Daniel Fowler
November 12, 2018

"In 2019 there will be a growth in supply so we're looking at a different strategy than the 100 per cent conformity in 2016", UAE energy minister and outgoing Opec president Suhail Mazrouei said, after the group's Joint Ministerial Monitoring Committee (JMMC) meeting in Abu Dhabi.

The Organization of the Petroleum Exporting Countries and the International Energy Agency release their respective monthly reports on the outlook for oil supply and demand later this week.

The Organization of the Petroleum Exporting Countries (OPEC), which is led by Saudi Arabia, agreed in June with a bloc of 10 petroleum-producing nations led by Russian Federation, to increase global supply by one million bpd.

The UAE's Mazrouei said that the goal of the OPEC and non-OPEC cooperation was to strike a balance in the market, adding that recommendations for possible action will be made to next month's ministerial conference.

Falih told reporters ahead of the meeting that Saudi Arabia's "crude exports for December will be 500,000 bpd lower than November".

Earlier Falih said oil-producing countries have not yet reached an agreement on cutting output.

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

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"Saudi Arabia has stepped in front of the oil market bears, proactively announcing they will reduce exports", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.

US West Texas Intermediate (WTI) crude oil futures were at $60.73 per barrel, up 54 cents, or 0.9 percent from their last settlement.

The world›s top oil exporter has been pumping 10.7 million bpd since October, according to Falih. He said the committee were reviewing the market and would draw up a plan to deal with the prospect of higher supply in 2019.

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.

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

The imposition of sanctions against Iran and those who do business with Iran has had a very limited impact on oil prices, due in large part to strong output from the USA and Russian Federation.

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

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