By Grant Smith
Many Opec and allied oil producers see a need to cut output to stave off a new surplus, a key member of the coalition said, as delegates gathered in Abu Dhabi amid sinking prices.
A number of global producers agree they should pump less oil in 2019, and a reduction of one million barrels a day would be a good number, Oman’s Oil Minister Mohammed Al-Rumhy said.
The producers are considering a range of cutbacks, including a decrease in output by as up to a million barrels a day, according to delegates. “I think probably there is support that right now there is too much oil in the market and stock, inventories are building up,” Mr Al-Rumhy said.
A technical committee representing the coalition, projected that a global oil surplus will resurface in 2019 if they continue pumping at current rates. Nonetheless, Saudi Arabia’s energy minister Khalid Al-Falih, representing Opec’s biggest member, said ahead of yesterday’s meeting that it was “too premature” to discuss cutting output.
Brent plunged below $70 a barrel for the first time in six months, shedding 4%, last week.
A production cut in 2019 by the Opec+ producers cannot be ruled out, Magzum Mirzagaliev, Kazakhstan’s deputy energy minister, told reporters in the UAE capital. Russia isn’t ready to disclose its position on whether the group should reduce output further before the committee’s meeting, according to sources.
Opec and its allies meet under mounting pressure to consider renewed production cuts after a slump in oil prices.