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

Saudi energy minister lands in Baghdad to discuss reducing oil production

Oil prices are staging a comeback, driving Brent crude oil above $70 following an announcement from the kingdom of Saudi Arabia indicating that the world's major crude producers plan to cut supply significantly in 2019. Novak showed no sign he was ready to act immediately and Vagit Alekperov, the CEO of Russia's second-largest oil producer Lukoil PJSC, said there's no need to cut output now.

"One thing that is abundantly clear, OPEC is in for a shale shocker as U.S. crude production increased to a record 11.6 million barrels per day and will cross the 12 million threshold next year", Innes said. "We are not in the business of pinpointing a price going forward".

Opec and Russian Federation could revise their strategy, their oil ministers said at the conclusion of the Joint Ministerial Monitoring Committee meeting in Abu Dhabi on Sunday.

Another potential problem: Thatte notes that money managers' oil positioning, which has historically moved with oil prices, are at a 15-month low. You see, we're a small producer of oil, 600 barrels a day - nothing compared to countries like Saudi, which is entirely dependent upon oil revenue.

The group's caution arises partly from the unpredictability of Iranian supply.

The United States last week said eight jurisdictions - China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey - would be able to continue buying Iranian oil for six months without fear of U.S. penalties under sanctions on trading with Iran. That confounded a market that was anticipating a stricter enforcement.

The committee that oversees the 2016 OPEC+ agreement to manage supply met Sunday in Abu Dhabi.

The nearly unexpected October crash in global crude prices raised concerns from stakeholders who called on OPEC to act swiftly towards remedying the situation.

Mr Yergin said: "It's the big three, it's Saudi Arabia, Russia and the USA, this is a different configuration in the oil market than the traditional OPEC-non-OPEC one and so the world is having to adjust". Futures are still down about 18 percent from a 2014 high reached early last month.

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Benchmark Brent crude, which had been trading above $80 a barrel recently, now hovers just over $70 after the US sanction waivers on Iran.

While current crude prices are still higher than a year ago, they're well below what Saudi Arabia needs to balance its budget. It's a concern shared by Opec secretary-general Mohammad Barkindo, who said on Monday that the market balance is under threat from surplus supply and dwindling demand.

Saudi Arabia may also struggle to convince other producers to follow its lead.

"There are a lot of assumptions in their projections that may change", al-Falih said.

Forecasts for non-OPEC supply growth in 2019 were increased by 120,000 barrels a day.

"His twitter comments and back channel pressure played a pivotal role in prompting Saudi Arabia and its key OPEC allies to open the taps", it says.

"We want to enter 2019 with a minimum amount of stocks", Falih said. "We have to wait and see how the market is unfolding".

Global appetite for the group's crude will be about 31.5 million barrels a day next year, OPEC said.

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