Saudi Arabia plans to cut its oil reserves by 500,000 barrels / day in December

Abu Dhabi: Saudi Arabia plans to cut its oil supply by 0.5 million barrels a year on world markets. December, said his Minister of Energy Sunday, while OPEC has uncertain prospects to try to persuade other producers to agree a coordinated reduction in production. -Falih told reporters that crude oil appointments from Saudi Aramco customers would be reduced by 500,000 b / d in December compared with November due to a declining seasonal demand, which represents a reduction in Global oil supply of about 0.5%.

Saudi Arabia has increased its output by about 1 million bpd this year under pressure US President Donald Trump and other consumer countries will help balance the market and offset the decline in Iranian supply attributable sanctions imposed by the United States.

Iran's customers benefiting from generous exemptions allowing them to continue buying crude, growing concern about excess supply and oil prices The price fell below the bar $ 70 a barrel on Friday, against $ 85 a barrel in October.

"We increased production in response to demand," Falih told reporters on the eve of a joint meeting of the Opec and non-Opec market surveillance committee.

"I'm going to tell you a story that December's nominations are 500,000 barrels less than November. So we are witnessing a gradual decrease in production at the end of the year, maintenance … so we are shipping less in December than in November. "

Saudi Arabia discusses a proposal that could lead to the release of OPEC and non-OPEC oil producers have reduced their production by nearly $ 20,000. A million bpd, two people told Reuters on Sunday, while the world's biggest oil exporter was struggling with a drop in crude prices.

including the level of Iranian exports after the The United States imposed sanctions on Tehran but granted derogations to Iran's main oil buyers to allow them to continue to buy oil.

Russia's participation was essential to help Opec to rebalance the market in 2017-18. "But Russian Energy Minister Alexander Novak said on Sunday that he was not sure that the market would be oversupplied next year. excess supply for the The next few months would be seasonal, while the market could be balanced again and demand could even outstrip supply.

The Iranian Waiver Surprised

Riyad was surprised by Washington's waivers to Iran's major customers, such as China and India, which had an impact negative on the price of oil, said at least three industries and sources of Opec Reuters .

Now, Saudi Arabia wants to prevent

Under an agreement expiring at the end of the year, Opec producers and other producers have agreed to reduce their production of about 1.8 million barrels a day. .

But producers eventually cut back on their spending and decided in June to limit their cuts more than their production targets, which amounted to about a million bpd.

Opec and its allies will meet in Vienna 6-7. December to decide the exit policy for 2019.

"There is a general discussion about this (cut). But the question is how much should be reduced the market, "said one of the people in Abu Dhabi on Sunday.

" No one expected these derogations. Saudi Arabia wants to at least put a floor on oil prices. Nobody wants a free fall of prices, "added this person.

Kazakh Deputy Minister of Energy, Magzum Mirzagaliyev, told reporters in Abu Dhabi that he believed he understood that Saudi Arabia suggested using the production levels of August to October as a baseline for determining reductions.

Falih did not rule out the possibility of a reduction next year. but he also said that he would like to "move to 2019 with a minimum of interventions".

"I think that in the ideal we do not like to reduce. Ideally, we want the market to remain generously stocked and comfortable. We will cut only if we see a persistent overabundance and if, frankly, we see signs of this exit from the United States, we have not seen the signs at the global level, "he told the press.

Brent crude fell 47 cents on Friday. or 0.7% to $ 70.18 per barrel. It lost about 3.6% over the week and lost more than 15% this quarter.

Washington granted 180-day waivers to eight Iranian oil buyers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. Trade data show that this group absorbs up to three quarters of Iran's oil exports by sea.

The US administration is committed to zeroing Iranian oil exports and Trump has been pressuring Saudi Arabia to increase production to cool the market.

Iran's crude exports could fall to just over a million bpd in November, about one-third of their peak in mid-2018. But traders and badysts believe that this figure could increase from December, with importers using their waivers.

Falih announced last month that the kingdom would inject 11 million bpd in November, against 10.7 million bpd in October. He also added that it might be necessary to intervene to reduce oil stocks after increases in recent months.

Reuters' Maha El Dahan, Stanley Carvalho, Tuqa Khalid and Nafisa Eltahir contributed to this story.

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