Saudis Arabia, the world’s largest crude exporter, may propose an eventual OPEC production cut of 1 million barrels of oil
a day that may take effect in 2016, Energy Intelligence reported Thursday, citing a group delegate it didn’t identify.
Saudi Arabia
would consider the cut only if a number of conditions are met, and the
output reduction would not be agreed at the meeting Friday of the
Organization of Petroleum Exporting Countries, according to the report,
in EI’s International Oil Daily publication.
Non-OPEC producers
including Russia, Mexico, Oman and Kazakhstan would also have to
participate as would Iran, the report said. Iraq would have to freeze
production at current levels or agree to cut with the group, the report
said.
“Even if the report is
credible, there will be a long way to go before the market could have
any reasonable assurance that an agreement was possible and that it
could be adhered to,” Ric Spooner, a chief analyst at CMC Markets
in Sydney, said by phone. “The fact that it’s a Saudi proposal gives it
a bit of extra weight because they are a credible operator in the oil
market.”
Brent crude
rose as much as 2 percent to $43.35 a barrel and was at $43.32 as of 2:07 p.m. Hong Kong time.
Oil prices
have tumbled in the past year as Saudi Arabia,
Russia and the U.S. boosted output. OPEC decided in November last year
and again in June to keep its production quotas unchanged, after
exceeding its target of 30 million barrels a day in each month since
June 2014. Saudi Arabia Oil Minister Ali al-Naimi is in Vienna with other oil ministers as OPEC plans to review the target on Dec. 4.
Bloomberg
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