Saudi Arabia is reducing oil supply; OPEC may cut too

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Worldwide benchmark Brent crude oil futures were at $71.11 per barrel at 0051 GMT, up 93 cents, or 1.3 percent from their last close.

Saudi Arabia's energy minister said oil-producing nations should cut output by one million barrels per day to re-balance the market.

"If you are a producer in Texas, you have to be happy with the fact that there is a swing supplier in the market that wants to keep prices supported", said Matt Smith, director of commodity research at ClipperData.

Oil prices rose by about one per cent on Monday after top exporter, Saudi Arabia, announced a cut in supply for December.

Trump tweeted, "Hopefully, Saudi Arabia and OPEC will not be cutting oil production". The rupiah's plunge to a 20-year low last month is spurring Southeast Asia's biggest economy to push forward with a plan to reduce pain from a growing dependence on imported crude oil.

Meanwhile, Sultan Ahmed al-Jaber, the head of the state-run Abu Dhabi National Oil Co., said the UAE planned to increase oil production to 4 million barrels a day by 2020 and 5 million barrels a day by 2030.

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That means USA producers have ramped up output even though many of them have been getting less than $60 per barrel for most of the year, far below the global market price of oil. Since May, Opec production has risen 820,000 barrels a day, and Russia's output increased from 440,000 barrels a day in May to 11.4 million b/d in October.

"Prices have been falling amid a continued rise in crude supplies from big producers, such as Saudi Arabia, Russia and the U.S., more than compensating for lost Iranian barrels", Forex.com analyst Fawad Razaqzada told AFP before the meeting.

"In general, in November the output is expected to be slightly less than the October level", Novak was quoted as saying. While they were willing to take that action to ease prices and shield themselves from attacks from the White House, many countries also need the value of a barrel to stay high enough to balance their budgets. And even if the small Saudi cut doesn't immediately improve oil pricing, it may signal OPEC's intention to cut further in December.

USA sanctions against Iran had removed less oil than expected from the market, Falih said.

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.

Molchanov cautioned that companies make their investment decisions based on long-term oil price forecasts, not short-term moves.

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"Ideally, we don't like to cut", Al-Falih said.

Brent crude oil prices soared to US$85 a barrel in early October in anticipation of United States sanctions being re-imposed on Iran.

"OPEC is essential for the stability of oil markets", he said.

UAE energy minister Suhail Al Mazrouei, who is also OPEC president, said the cartel wouldn't allow the market to become oversupplied.

Commerzbank AG, Germany's second-largest lender, said last Friday oil producers must act to prevent a free fall of prices.

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