OPEC, partners discuss oil supply cut to 1.4 million bpd: sources

DUBAI / LONDON (Reuters) – OPEC and its partners are discussing a proposal to cut oil output by 1.4 million barrels per day (bpd) for 2019, price-sapping oversupply.

The United States of America, the Organization of the Petroleum Exporting Countries, is talking about U-turn just months after increasing production.

Such a shift could anger U.S. President Donald Trump, who urged OPEC on Monday not to cut supply. United States, while the sources said Russia may need persuading to back such a move.

A steep slide in the participants. Brent crude has fallen from a four-year high of $ 86 a barrel in early October to $ 66 on Wednesday. Just weeks ago, some trading firms were talking about $ 100 oil.

The sources, which declined to be discussed, said 1.4 million in favor of Saudi Arabia, not-OPEC Russia and other nations in Abu Dhabi on Sunday.

"I believe a cut of 1.4 million dollars is one of the sources said.

OPEC and a group of non-OPEC nations, led by Russia, have been cooperating to limit their supply of 2017. They do not know how to reduce their prices.

The OPEC-led deal got rid of a supply of glut in the United States and other countries outside the group soared. The then Saudi Oil Minister Ali al-Naimi blocked an OPEC supply cut to preserve market share.

This time, Saudi Energy Minister Khalid al-Falih has made a positive contribution to the market. OPEC meets on Dec. 6 to set policy for 2019.

A new round of OPEC-led supply cuts in 2019 would further support U.S. shale oil production, possibly repeating the cycle that played out in 2014.

Oil prices LCOc1 rose on Wednesday, after Tuesday's 6.6 percent drop, the largest one-day loss since July.

FIGURE YET TO BE AGREED

OPEC and its partners have not settled on a final figure for the new supply cut, the sources said.

One of the three sources said a minimum cut of 1 million was more than 1.4 million bpd. Another source, an OPEC delegate, agreed that a larger cut than 1.4 million bpd was possible, depending on the market.

Nigeria and Libya, which are exempt from the current supply-limiting agreement, could be included in a new agreement, two of the sources familiar with the matter said.

"We are talking about a cut from everyone, including Nigeria and Libya because their production has exceeded the cap in recent months," one source said.

While Nigeria and Libyan output has risen, another OPEC member Iran is facing lower exports due to U.S. sanctions that started this month. Tehran might not deliver a voluntary cut, another of the three sources said.

OPEC officials were not sure whether it would be possible Russian Energy Minister Alexander Novak said on Wednesday no action was warranted to stem the decline in prices.

"The market is quite volatile today. We remember that the price was sharply rising in the same way, now it's going down. We have to look at it, "he said in Singapore.

But OPEC officials hope Moscow will eventually come round.

One of the three sources said that it could be gradual, quoting the example of the 2017 output reduction when Moscow delivered its share of the cuts in phases.

"There are a few challenges to the proposal and Russia is one of them," another source said.