Saudi Arabia trimming oil exports in December, but 'no consensus' among oil producers to cut output
ABU DHABI: Saudi Arabia plans to reduce oil supply to world markets by
0.5 million barrels per day in December, its energy minister said on
Sunday, as the OPEC power faces uncertain prospects in its attempts to
persuade other producers to agree a coordinated output cut.
Khalid al-Falih told reporters that Saudi Aramco’s customer crude oil
nominations would fall by 500,000 bpd in December versus November due to
seasonal lower demand. The cut represents a reduction in global oil
supply of about 0.5 percent.
Saudi Arabia has increased output by just about 1 million bpd this year
under pressure from US President Donald Trump and other consuming
countries to help balance the market to compensate for lower supplies
from Iran due to US sanctions.
But since Iran's customers were given generous waivers to continue
buying crude, concerns grew about market oversupply and oil prices fell
to below $70 per barrel on Friday from $85 a barrel in October.
"We have been increasing production in response to demand," Falih told
reporters in Abu Dhabi ahead of a joint OPEC, non-OPEC market monitoring
committee meeting.
"I'll tell you a piece of news which is (that) December nominations are
500,000 barrels less than November. So we are seeing a tapering off part
of it is year end, part of it is maintenance.... so we will be shipping
less in December than we are in November.”
Saudi Arabia is discussing a proposal that could see OPEC and non-OPEC
oil producers cut output by up to 1 million bpd, two sources told
Reuters earlier on Sunday, as the world's top oil exporter grapples with
a drop in crude prices.
“There is no consensus yet among oil producers about cutting production,” Al-Falih said.
It was “premature to talk about a specific action,” he told reporters,
asked about the possibility of an output from the entire oil-production
bloc. “We have to study all the factors,” Falih said.
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.
Russian participation was key to helping OPEC rebalance the market
during 2017-18. But Russian Energy Minister Alexander Novak said on
Sunday he wasn’t certain the market would be oversupplied next year.
He said the oversupply for the next few months would be seasonally
driven while by mid 2019 the market could be balanced again and demand
could even exceed supply.
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