Oil prices rise as Saudi Arabia signals production cut

Oman oil minister says majority of OPEC and its allies support cut

"The consensus among all members is that we need to do whatever it takes to balance the market", Al Falih said.

The U.S. has meanwhile allowed some of its allies - Greece, India, Italy, Japan, South Korea, Taiwan and Turkey - as well as rival China to continue to purchase Iranian oil despite re-imposed sanctions, as long as they work to reduce their imports to zero.

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

"We're kind of back to square one: It must feel like November 2016 to them, a lot", said John Kilduff, a Partner at Again Capital Management in NY, referring to the time period when OPEC and its allies agreed to initiate production cuts.

"But the question is how much is needed to be reduced by the market", one of the sources said ahead of a meeting by a monitoring committee in Abu Dhabi on Sunday attended by top producers Saudi Arabia and Russian Federation. "Officials at this weekend's meeting fretted about higher supply growth and the need to balance the market in 2019", wrote Barron's. Brent crude dropped below $70 a barrel on Friday for the first time since April, while the New York's West Texas Intermediate sank below $60 a barrel, a nine-month low.

Trump in recent weeks demanded the oil cartel increase production to drive down USA gasoline prices.

"A new strategy needs to be formed. whether it is a cut in production or something else, but it will not be an increase in production", he said.

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

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While Riyadh has made a decision to lower production, the rest of the attendees did not come to a consensus on the matter, according to Falih.

Since then, OPEC production has risen 820,000 bpd since May, according to the latest S&P Global Platts OPEC survey.

The market had anticipated that exports from OPEC member Iran would fall precipitously following the institution of US sanctions in November.

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.

Kazakh deputy energy minister Magzum Mirzagaliyev told reporters in Abu Dhabi that he understood Saudi Arabia was suggesting using August-October output levels as a baseline for determining cuts.

Output from the world's top oil producers Russian Federation, the United States and Saudi Arabia has risen by 1.05 million bpd in the last three months, based on official output figures.

He said market sentiment had shifted from fears of shortages to worries about oversupply. Crude prices have dropped approximately one-fifth since early October.

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