OPEC Countries Thinking of Cutting Oil Production

OPEC Countries Thinking of Cutting Oil Production

The comments from the minister, Khalid al-Falih, show the balancing act the USA allies face in dealing with President Donald Trump's actions related to the oil industry.

West Texas Intermediate, the U.S. benchmark oil price, had been declining for the hour before the tweet and briefly dipped lower before trading at $60.14 a barrel, down 5 cents for the day at 1:49pm in NY.

The minister also indicated OPEC members are willing to cut down production by one million barrels a day to "balance the market".

Oil producing countries should cut output by one million barrels per day to re-balance the market, Saudi Arabia's energy minister said Monday, following a drop in crude prices.

UAE energy minister Suhail Al Mazrouei said other factors such as a stronger dollar and the risk of trade wars posed significant threats to the global oil markets as much as an impending supply glut.

Energy ministers of top producers Russian Federation and Saudi Arabia will join other OPEC and non-OPEC officials for the meeting of the Joint Ministerial Monitoring Committee, which oversees production levels.

Crude prices hit four-year highs of more than $80 a barrel in late September and early October over fears of the impact of United States sanctions on Iranian oil exports, sparking warnings of prices hitting $100. America's Ashlee Banks reports.

Ahead of next month's OPEC meeting, Saudi Arabia said it will slash production by 500,00 barrels, or about 0.5% of current global supply.

In this light, Saudi Arabia has announced a new round of output cuts aimed at supporting the prices - which are, in the near-term, still expected to remain at that country's fiscal breakeven, estimated at roughly $70/bbl.

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Oil prices jumped by as much as 2% on the prospects of reduced supply from OPEC.

A big concern for Saudi Arabia and other traditional producers from the Middle East-dominated OPEC is the surge in U.S. output.

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

The oil producers have made a decision to act after oil dropped as much as 20 percent in one month, after hitting a four-year high in early October.

The fresh plunge comes as representatives from Opec and non-cartel members prepare to meet Sunday in Abu Dhabi to discuss a possible output cut to protect their revenues amid slumping prices.

Other oil-market news Gasoline futures rose 1.5% to settle at US$1.6367 a gallon.

McNally said it was important for Saudi Arabia to signal to the markets that a production cut was coming as traders anxious about a build up in excess supplies.

Friday marked the 10th consecutive day crude oil prices fell.

"We need to look at the situation very carefully to see how it will develop so that we don't end up changing our course by 180 degrees every month", Novak said.

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