The resumption of oil production in 2019 can not be ruled out: OPEC source

LONDON (Reuters) – A return to oil production cuts from OPEC and its allies next year can not be ruled out, a senior OPEC official said Wednesday in a bid to cut oil production from OPEC and its allies next year. Avoid an overabundance of supply that may weigh on prices.

The source responded to a report by the Russian news agency TASS that Russia and Saudi Arabia had begun bilateral talks on possible restrictions on production in 2019.

OPEC led by Saudi Arabia and its allies, including Russia, decided in June to relax production restrictions since 2017, following pressure from US President Donald Trump to cut oil prices and offset Iranian supply losses.

A second representative from the Organization of Petroleum Exporting Countries, asked if the discussions showed a return to supply cuts in 2019: "Certainly not the opposite.

Oil prices have been under downward pressure due to higher supplies, even though Iranian exports are expected to fall due to new sanctions imposed by the United States. Forecasts of over supply for 2019 and slowing demand also weighed on the market.

Brent crude LCoC1 rose from its highest level in four years in October, surpassing $ 86 per barrel at $ 71 on Tuesday. Prices climbed back above $ 73 on Wednesday, supported by the TASS report.

A ministerial committee composed of OPEC members and allies meets Sunday in Abu Dhabi to discuss the market and prospects for 2019.

This group, called JMMC, could make a recommendation on production policy for 2019 at the next decision-making meeting of OPEC Oil Ministers and non-OPEC countries, said a third source of OPEC. This meeting is taking place on 6 and 7 December in Vienna.

"Any serious discussion will take place towards the December meeting," said the source.