Oil prices rose 1.5% on Monday, a day after Saudi Arabia’s Energy Minister Khalid al-Falih said the kingdom would reduce oil exports by half a million barrels a day in December, Reuters reported. Speculation is rife that other Organisation of the Petroleum Exporting Countries, or OPEC, may announce similar cuts.
After a meeting in Abu Dhabi, several oil producers – including those not part of OPEC – said they had “reviewed the current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements.” These countries said they would consider “options on new 2019 production adjustments, which may require new strategies to balance the market”.
Falih said Saudi Arabia was not pushing for the break-up of OPEC, which at present supplies about half the world’s petroleum requirements, Reuters reported. Saudi Arabia is the de facto leader of the group.
The energy minister told reporters that Saudi Arabia believes that OPEC would continue to remain in operation. Falih down played a report in The Wall Street Journal that quoted unidentified people as saying that a Saudi government-funded think-tank has been analysing possible consequences of the group’s break-up.
The think-tank was just trying “to think outside the box” and the Saudi administration has “no consideration whatsoever to eliminate OPEC”, Reuters reported.