Saudi Arabia admitted the need for a decrease in oil output in 2019

Saudi Arabia can reduce oil output in 2019, Energy Minister Khalid Al-Falih said.

According to him, Riyadh can reduce daily production in December by 500,000 barrels as compared to November in response to other manufacturers’ requests about it. Khalid Al-Fatih made this statement despite the fact that so far OPEC+ has not announced any changes in oil production.

Five days earlier, Iran called Saudi Arabia and Russia for reducing daily oil production to 1 million barrels, because its prices fell by $15 due to the increase in production rates.

OPEC and other major exporters decided to increase oil output by 1 million barrels for six months at the summit in June 2018. The initiative was proposed by Moscow and Riyadh. Prior to that, the 2016 OPEC+ agreement was in effect, according to which production declined totally by 1.8 million barrels per day. The agreement was prolonged twice; the deadline was the end of 2018.

On November 5, amid the introduction of a new package of US sanctions against Iran, which, in particular, restricted the purchase of Iranian oil, the price of Brent crude dropped below $72 a barrel.

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Greg Nilson

Greg Nilson is a financial markets contributor and observer at FXOpen. He specializes in market strategies and technical and fundamental analysis. He has had years of experience as an independent FX trader.

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