Opec, partners discuss oil supply cut of up to 1.4 million bpd

Representatives from here major oil producers met in Abu Dhabi at the weekend

Yawger noted that the potential pullback in Saudi output has in part already been made up by the sharp bump in USA production, which reached 11.6 million bpd in the most recent week, a new record. USA crude had declined for a record 12 consecutive sessions to the lowest since November 2017.

The IEA left its forecast for global demand growth for 2018 and 2019 unchanged from last month at 1.3 million barrels per day (bpd) and 1.4 million bpd, respectively, but cut its forecast for non-OECD demand growth, the engine of expansion in world oil consumption.

Oil markets are being pressured by surging supply from OPEC, Russia, the United States and other producers and worries that a global economic slowdown could cut into energy demand.

Citing the Trump administration's decision to grant the top buyers of Iran's oil a temporary waiver from sanctions imposed on November 5, Al-Falih said the "sanctions didn't cut so much out of the market as anticipated", Radio Free Europe reported.

Opec is meeting on December 6 and is expected to decide then whether to carry on the production cuts. Money managers' combined bullish positions in WTI and Brent sank to the lowest in 14 months as of November 6, Commodity Futures Trading Commission data show, as long positions shrank and shorts increased. Saudi Arabia said on Monday producers need to cut 1 million barrels a day from October levels. The talks are preliminary, and the size of the final cut will largely depend on the starting point they use, said one of the people.

United States crude oil output from its seven major shale basins is expected to hit a record of 7.94-million barrels a day in December, the USA department of energy's Energy Information Administration (EIA) said on Tuesday.

Nigeria and Libya, which are exempt from the current supply limiting accord, could be included in a new agreement, two of the sources familiar with the matter said.

The Paris-based agency welcomed the higher production and stockpiles, saying that the response to the call by the IEA and others to boost production "is a reminder that the oil industry works best when it works together".

While Nigeria and Libyan output has risen, another OPEC member Iran is facing lower exports due to USA sanctions that started this month.

That led to a sharp price drop on Monday, which continued into Tuesday.

The agency said that lower prices "are clearly a benefit to consumers", especially those in developing countries who are seeing higher fuel prices due to weak national currencies.

One of the three sources said any cut for Russian Federation could be gradual, citing the example of the 2017 output reduction deal when Moscow delivered its share of the cuts in phases.



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