Oil prices rise 1.5% after Saudi Arabia announces supply cut in December

Oil prices rise 1.5% after Saudi Arabia announces supply cut in December

Oil prices rise 1.5% after Saudi Arabia announces supply cut in December

Oil rigs at work at dusk.

Peter Kiernan, lead energy analyst at the Economist Intelligence Unit in Singapore, said OPEC was "focused on mitigating downside risks" after crude prices declined by around 20 percent over a month following a supply surge, particularly from the top three producers the United States, Russia and Saudi Arabia.

Separately, Khalid al-Falih, energy minister of the world's top supplier Saudi Arabia, said the kingdom would cut production by 500,000 barrels per day, AFP reported.

These countries said they would consider "options on new 2019 production adjustments, which may require new strategies to balance the market". Saudi Arabia will cut production as well as exports, he said. Energy ministers from Oman, Kuwait and Algeria were among others who attended the one-day meeting.

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.

Since then, OPEC production has risen 820,000 bpd since May, according to the latest S&P Global Platts OPEC survey.

"Iran's armed forces. are prepared today as in the past to protect our fleet of oil tankers against any threats so that it can continue to use marine waterways", Rear-Admiral Mahmoud Mousavi, a deputy commander of Iran's Army, said Monday.

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

Israelis 'kill Hamas commander' in Gaza exchange of fire
Israel and Hamas have fought three wars since 2008, but both sides have shown that they want to avoid another full scale conflict. Hamas accused Israel of sabotaging an emerging ceasefire agreement that was brokered by Egypt and supported by Qatar.

The military official also played down Washington's rhetoric and said the USA has time and again hurled such threats against Iran only to find that "they have never had nor will they have" any effect in the future.

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.

"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.

Decision comes amid fears of oversupply.

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

The UAE's Mazrouei said the goal of OPEC and non-OPEC cooperation was to strike a balance in the market.

In June, it persuaded fellow producers to end 18 months of production cuts and pump more crude in response to falling output in Venezuela and Iran and pressure over prices from U.S. President Donald Trump. "If that means trimming supply by a million [barrels per day], we will do it". That confounded a market that was anticipating a stricter enforcement.

Latest News